Zscaler Acquires Avalor: A Step Towards Integrating More AI in Security Tools
Zscaler, a cloud security company based in San Jose, California, has bought cybersecurity startup Avalor 26 months after its inception, according to reports, for a sum of $310 million in cash and equity.
In a press release publicizing the news, Zscaler’s founder, and CEO, Jay Chaudhry stated that this acquisition would enhance Zscaler’s platform with features such as efficient report of security incidents, incident remediation, asset discovery, data categorization, security policy creation and more.
“Artificial Intelligence is only as efficient as the underlying data, and many solutions do not possess the extra context and information from data sources across the company to truly utilize security-specific AI models,” Chaudhry expressed in a press statement. “Zscaler operates the biggest security cloud worldwide with the most useful data for training security-specific large language models, and with Avalor’s acquisition, we can recognize vulnerabilities more effectively while anticipating and preventing breaches.”
Raanan Raz and Kfir Tishbi, who was formerly the head of the engineering team at Datorama, a marketing analytics firm bought by Salesforce in 2018, co-founded Avalor. Raz and Tishbi collaborated at Datorama both before and after the Salesforce buyout.
Avalor serves as a reliable record for cybersecurity elements, controls, identities, vulnerabilities, bugs, and other data points. This enables security teams to gather, standardize, de-duplicate and monitor risk data from identification to resolution.
This idea, though not unique, is also pursued by several startups, such as Securiti and Dig Security. However, what differentiates Avalor is its capability to manage data from any source in any form, in addition to its distinct selection of vulnerability risk management and prioritization tools.
Before being acquired by Zscaler, Avalor successfully raised $30 million from investors, including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts. Raz envisions Zscaler taking the venture and its team of approximately 80 people based in the U.S. and Israel to new heights.
Raz expressed in a post on Avalor’s blog published on Thursday morning, “[With Zscaler, ] we obtain immediate access to a plethora of resources that would have taken us years to build organically — 7,000 customers, 4,200 global channel partners, almost universal customer recognition, and the endorsement of a $2 billion business supporting us. We will continue as a complete Avalor team operating independently, with the impressive Zscaler resources assisting us.”
Zscaler’s third acquisition is Avalor, following Canonic and Trustdome. Canonic is a startup concentrating on the defense against cyberattacks aimed at software-as-a-service offerings, while Trustdome is a platform for cloud infrastructure entitlement. Established in 2007 by Chaudhry and K. Kailash, Zscaler, which debuted on the market in March 2018, boasts approximately 7,000 employees and a market cap approximately $30 billion.
As noted by Chris Metinko from Crunchbase earlier today, Zscaler’s acquisition, along with others in the cybersecurity industry, could potentially revitalize activity in the sluggish cyber M&A landscape. According to Crunchbase, there were just 66 M&A deals involving VC-backed cybersecurity startups last year, a 26% reduction from 2022’s 89 deals and over a 50% decrease from 2021’s 139 deals.
As of 2024, there have been 18 cyber security-linked mergers and acquisitions. Companies such as Wiz, SentinelOne, and CrowdStrike have made particularly noteworthy moves.
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