In a strategic move to bolster its cybersecurity capabilities, American cybersecurity giant Zscaler is reportedly in advanced negotiations to acquire Israeli startup Avalor for an estimated $250-350 million, according to sources. If successful, this acquisition would mark Zscaler’s third venture into the Israeli tech landscape, following the acquisitions of Canonic in February of the previous year for approximately $50 million and Trustdome for $40 million in April 2021. Zscaler, with a current market cap of around $34 billion, is a cybersecurity industry leader, employing about 6,000 people and boasting annual revenues of approximately $2 billion.
Avalor’s Background:
Avalor, based in Ramat Gan, Israel, emerged from stealth mode in April of the preceding year, making waves in the cybersecurity arena. The startup successfully raised a substantial $25 million in a Series A funding round led by TCV, with participation from Salesforce Ventures. This Series A funding followed a $5 million Seed round that included backing from Cyberstarts, Jibe Ventures, and industry angels. Avalor has since positioned itself as a noteworthy player in the Israeli tech ecosystem.
Founders and Expertise:
Co-founded by Raanan Raz and Kfir Tishbi, Avalor brings a wealth of expertise to the cybersecurity realm. Before Avalor, Raz played a pivotal role in leading the engineering at Dataroma, contributing to the development of the data platform that ultimately became the Salesforce Marketing Cloud Intelligence platform. Dataroma, under Raz’s leadership, was acquired by Salesforce for a substantial $820 million in 2018. Tishbi, on the other hand, has a background in building high-performance computing solutions at CitiBank, served as a founding member of the AI lab at Playtika, and later joined Datorama to oversee significant big data initiatives.
Strategic Implications:
Zscaler’s interest in Avalor underscores the company’s commitment to staying at the forefront of cybersecurity innovation. With an increasing number of cyber threats and the evolving nature of the digital landscape, acquisitions of cutting-edge startups like Avalor enable Zscaler to enhance its technological capabilities and provide more robust cybersecurity solutions to its clientele.
Potential Impact:
If the negotiations reach a successful conclusion, the acquisition of Avalor by Zscaler is expected to fortify the latter’s position as a global cybersecurity powerhouse. The infusion of Avalor’s technological advancements and expertise into Zscaler’s portfolio could result in the development of more comprehensive and sophisticated cybersecurity solutions, addressing the ever-growing challenges faced by organizations in the digital age.
As Zscaler explores the possibility of acquiring Avalor, the tech industry awaits the outcome of these negotiations. This potential deal not only signifies the continuing interest of major cybersecurity players in Israeli startups but also emphasizes the strategic importance of acquiring innovative technologies to stay ahead in the rapidly evolving cybersecurity landscape. If finalized, the acquisition could mark another significant milestone in the journey of both Zscaler and Avalor within the cybersecurity domain.