Introduction:
In a significant move to bolster its cloud security offerings, Zscaler, a leading cybersecurity company headquartered in San Jose, California, has acquired the cybersecurity startup Avalor. The acquisition, occurring 26 months after Avalor’s founding, reportedly amounted to $310 million in cash and equity.
The Vision Behind the Acquisition:
According to Zscaler founder and CEO Jay Chaudhry, the acquisition is aimed at enhancing Zscaler’s platform with additional capabilities, including streamlined reporting of security incidents, incident mitigation, asset discovery, data classification, security policy generation, and more, through the integration of advanced artificial intelligence (AI) technologies.
The Importance of AI in Cybersecurity:
Chaudhry emphasised the importance of leveraging AI in cybersecurity, stating, “AI is just as good as the underlying data, and many solutions lack the additional context and information from data sources across the enterprise to truly leverage security-specific AI models.” He further noted that Zscaler operates the world’s largest security cloud with extensive data relevant for training security-specific AI models, and with the acquisition of Avalor, Zscaler aims to more effectively identify vulnerabilities while predicting and preventing breaches.
Avalor’s Unique Offering:
Avalor, co-founded by Raanan Raz and Kfir Tishbi, offers a comprehensive cybersecurity platform that serves as a centralised source of truth for various security-related data points, including assets, controls, identities, vulnerabilities, and bugs. The platform enables security teams to aggregate, normalise, de-duplicate, and track risk data from discovery to remediation, providing organisations with valuable insights into their cybersecurity posture.
Differentiating Factors of Avalor:
What sets Avalor apart from other cybersecurity startups is its ability to handle data from virtually any source in any format, along with its unique set of vulnerability risk management and prioritisation tools. Prior to the acquisition, Avalor had secured $30 million in funding from investors, including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts.
Post-Acquisition Integration and Outlook:
Following the acquisition, Avalor will continue to operate independently as a whole entity within Zscaler, leveraging the resources and expertise of Zscaler to further enhance its offerings. Raz expressed optimism about the acquisition, highlighting the immediate access to resources that would have taken years to develop organically, including a large customer base, channel partners, and the validation of Zscaler’s reputation and market presence.
Conclusion and Market Impact:
This acquisition marks Zscaler’s third acquisition, following previous acquisitions of Canonic, focused on protecting against cyberattacks targeting software-as-a-service products, and Trust Dome, a cloud infrastructure entitlement platform. With cybersecurity threats on the rise, the acquisition of Avalor by Zscaler, along with other recent acquisitions in the cybersecurity space, is expected to stimulate activity in the cyber M&A market, which has seen a decline in recent years.