Zscaler, a San Jose-based cloud security company recently made headlines with its acquisition of Avalor, a cybersecurity startup that emerged just 26 months prior. The deal, valued at $310 million in cash and equity, is set to bolster the acquiring company’s platform significantly. According to Jay Chaudhry, founder and CEO of Zscaler, this acquisition will enhance their capabilities, particularly in areas such as incident reporting, mitigation, asset discovery, data classification, and security policy development.
Avalor, co-founded by Raanan Raz and Kfir Tishbi, stands out in the cybersecurity landscape due to its comprehensive approach to handling various data points related to cybersecurity assets, controls, identities, vulnerabilities, and bugs. Despite facing competition from similar startups like Securiti and Dig Security, Avalor’s strength lies in its ability to manage data from diverse sources and formats, alongside offering unique vulnerability risk management tools.
Prior to being acquired, Avalor had secured $30 million from investors including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts. The acquisition by Zscaler provides Avalor with access to substantial resources, including a vast customer base, numerous channel partners, and significant market validation. Raz, in a blog post, expressed optimism about the acquisition, emphasizing the support of Zscaler’s resources and the opportunity for Avalor to continue operating independently with its existing team.
This acquisition marks Zscaler’s third strategic move following its previous acquisitions of Canonic, focused on protecting against cyberattacks targeting software-as-a-service products, and Trustdome, a cloud infrastructure entitlement platform. Founded in 2007, Zscaler has grown to a workforce of approximately 7,000 employees with a market capitalization of around $30 billion since going public in 2018.
The cybersecurity market has seen relatively subdued merger and acquisition activity recently. However, Zscaler’s acquisition, alongside others in the sector by companies like Wiz, SentinelOne, and CrowdStrike, suggests a potential revitalization of M&A activity within the cybersecurity space.
