CrowdStrike buys Israeli cloud security co Adaptive Shield

The acquisition price has not been disclosed, but it is estimated at $300 million, which represents a handsome return for investors in the Tel Aviv-based startup.

After acquisitions by Palo Alto Networks, Cisco, and Check Point of Israeli cloud security companies, CrowdStrike has followed suit with the acquisition of Adaptive Shield.

The acquisition price has not been disclosed, but it is estimated at $300 million, which represents a handsome return for investors in Adaptive Shield, which has raised a total of $44 million. The companies have said that the paid mostly in cash and partly in stock.

Among the big gainers from the deal are founders Maor Bin and Jony Shlomoff, who are estimated to hold 20-30% of the shares in Adaptive Shield; Vertex Ventures, which was one of the initial investors in the startup with private investors Zohar Alon and Yair Goldfinger, who are believed to hold a 25% stake, while Insight Partners, which invested later also has a 25% stake.

Other investors include Okta Ventures and Blackstone, which invested $10 million last year at a company valuation of $127 million, and hold nearly 8% of shares, according to PitchBook.

CrowdStrike is one of the biggest cybersecurity companies in the US, which has grown due to its cloud data security platforms. It is a rival of Israeli company SentinelOne (NYSE:S). Since 2020, CrowdStrike has bought four companies in Israel prior to this latest acquisition. The most recent acquisition was Flow Security, which it bought six months ago for $200 million. Prior to that it acquired Bionic for $350 million and Reposify and Preempt Security for smaller amounts that were not disclosed. CrowdStrike's development center in Israel is in ramat Gan and managed by Roman Blachman.

Based in Tel Aviv, Adaptive Shield has 100 employees. Like Wiz, Adaptive Shield helps data security teams in organizations to monitor and control the cybersecurity aspects of applications operating in a corporate cloud environment - including Slack, GitHub, Zoom, Salesforce, Microsoft and Google work applications. Adaptive Shield's platform enables configuration management, identification of connectivity between applications (API) and the risks involved, user management and detection of identity-based attacks on cloud applications.

CrowdStrike CEO George Kurtz said, "CrowdStrike was built to tackle the toughest cybersecurity challenges, and we drive relentless innovation based on what our customers need to stay ahead of modern threats. As SaaS and AI adoption grows, every new application brings additional complexity and the risk of misconfigurations across human and non-human accounts that create openings for sophisticated attacks. With the acquisition of Adaptive Shield, CrowdStrike will continue to set the standard for identity-based protection in the cloud, delivering best-in-class SaaS protection from the Falcon platform."

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Adaptive Shield cofounder and CEO Maor Bin added, "Widespread adoption of SaaS applications has rapidly expanded the enterprise attack surface, as shared responsibility models and fragmented security controls make SaaS environments a prime target. Our mission perfectly complements CrowdStrike, stopping SaaS breaches while further accelerating consolidation on cybersecurity's most comprehensive platform. I'm incredibly proud of our team for building the most advanced SaaS security solution, defining the market."

Published by Globes, Israel business news - en.globes.co.il - on November 6, 2024.

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