Zscaler Enhances Security Tools with AI through Acquisition of Avalor
Zscaler, a cloud security company based in San Jose, California, has recently acquired cybersecurity startup Avalor for a reported $310 million in cash and equity. This acquisition is aimed at expanding Zscaler’s platform by incorporating artificial intelligence (AI) capabilities into its security tools. The deal includes features such as streamlined reporting of security incidents, incident mitigation, asset discovery, data classification, security policy generation, and more.
The founder and CEO of Zscaler, Jay Chaudhry, expressed his excitement about the acquisition in a press release. He highlighted the importance of data in AI and mentioned that many existing solutions lack the necessary context and knowledge from enterprise-wide data sources to fully leverage security-specific AI models. With the acquisition of Avalor, Zscaler aims to enhance its ability to identify vulnerabilities, predict breaches, and prevent cybersecurity incidents.
Avalor was co-founded by Raanan Raz and Kfir Tishbi, who previously led the engineering team at Datorama, a marketing analytics company acquired by Salesforce in 2018. Avalor serves as a centralized source of truth for cybersecurity assets, controls, identities, vulnerabilities, bugs, and other data points. It allows security teams to aggregate, normalize, de-duplicate, and track risk data from discovery to remediation.
While there are several startups addressing similar challenges in the cybersecurity space, Avalor stands out due to its ability to handle data from various sources in any format. Additionally, it offers unique vulnerability risk management and prioritization tools. Prior to the acquisition, Avalor had secured $30 million in funding from investors such as TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts.
Raanan Raz expressed his optimism about joining forces with Zscaler in a blog post. He emphasized the immediate benefits of gaining access to Zscaler’s extensive resources, including a large customer base, global channel partners, and the validation of a successful $2 billion business. Raz assured that Avalor would continue to operate independently as a complete team, with the added support of Zscaler’s resources.
This acquisition marks Zscaler’s third in recent years. The company previously acquired Canonic, a startup focused on protecting against cyberattacks targeting software-as-a-service products, and Trustdome, a cloud infrastructure entitlement platform. Founded in 2007, Zscaler went public in March 2018 and currently has approximately 7,000 employees and a market cap of around $30 billion.
The acquisition of Avalor by Zscaler is expected to spark activity in the cybersecurity mergers and acquisitions (M&A) market. Last year, there was a decline in M&A deals involving VC-backed cybersecurity startups, with only 66 deals compared to 89 in 2022 and 139 in 2021. However, 2024 has seen notable M&A moves by companies like Wiz, SentinelOne, and CrowdStrike, with a total of 18 cybersecurity-related mergers and acquisitions so far.
As the cybersecurity landscape continues to evolve and threats become more sophisticated, companies like Zscaler are taking proactive steps to enhance their security tools. By incorporating AI capabilities through the acquisition of Avalor, Zscaler aims to strengthen its position as a leading provider of cloud security solutions. With the support of Zscaler’s resources and expertise, Avalor is poised for further growth and success in the cybersecurity industry.