The five biggest acquisitions of 2023 in Israeli tech
The five biggest acquisitions of 2023 in Israeli tech
Cybersecurity startups completely dominated the list of the most lucrative M&As involving Israeli startups this past year, with Talon Cyber Security leading the way after being acquired by Palo Alto Networks in a deal valued at $625 million
Completing an M&A is complicated in the best of times, not to mention when the macroeconomic situation is as complex as it was this past year. Valuations are almost always a sticking point when it comes to acquisition deals, and that was as true as ever with so much uncertainty shrouding the future of the tech sector. Nevertheless, there were plenty of deals involving Israeli companies that were closed over the past year, including some especially lucrative ones.
Below are listed the five largest acquisitions of Israeli startups during 2023. Some notable deals that just missed out were the purchase of cyber startup Ermetic for $265 million by Tenable, Cisco acquiring Lightspin for $200-250 million, and Rubrik buying cloud security startup Laminar for $200-250 million.
All the above, as well as the five acquisitions listed below, involve cybersecurity companies.
Talon Cyber Security, which develops a corporate browser, was acquired in November by the world’s most valuable cybersecurity company Palo Alto Networks for $625 million. Talon, which had raised a total of $126 million previously, announced a $100 million Series A round in August 2022 at a $350 million valuation. Evolution Equity Partners led the round, with participation from Ballistic Ventures, CrowdStrike's Falcon Fund, Merlin Ventures, SYN Ventures, and previous investors including CrowdStrike co-founder and CEO George Kurtz, Lightspeed Venture Partners, Sorenson Ventures, and Team8.
CEO and co-founder Ofer Ben-Noon registered his second significant exit, following the sale of the cybersecurity company Argus to the German automotive giant Continental AG in 2017 for approximately $350 million. The other founder, Ohad Bobrov, previously founded Lacon Security, which was sold to Check Point in 2015 for approximately $100 million.
Talon Cyber Security, founded in 2021, develops the TalonWork browser that simplifies endpoint security by serving as a secure access point to corporate applications and data on any device, managed or unmanaged, and on any operating system.
Israel’s cybersecurity pioneer Check Point acquired Perimeter 81 for $490 million back in August, marking the second-largest purchase in company history. This valuation could be regarded as disappointing for Perimeter 81 as it was valued at $1 billion in its most recent funding round in 2022, raising $100 million in a Series C. Nevertheless, many of its investors netted a generous profit from this sale.
Perimeter, which had raised a total of $165 million previously, develops Security Service Edge (SSE) solutions and Check Point intends to leverage its capabilities and integrate them into Check Point Infinity’s architecture to deliver a unified security solution across the network, cloud, and remote users.
Perimeter 81, launched in 2018 by co-founders Sagi Gidali and Amit Bareket, became Check Point’s seventh acquisition in the last four years, and its second largest ever after the purchase of Pointsec for $550 million in 2007.
Hewlett Packard Enterprise (HPE) acquired Israeli cybersecurity startup Axis Security for an estimated $400 million back in March. HPE made the acquisition through its subsidiary Aruba, a competitor of Axis.
Axis had raised a total of $100 million previously, netting $50 million in its most recent funding round, a Series C in March 2021. The round was led by new investor Spark Capital, which had previously invested in Twitter, Tumblr, and Slack. Existing investors, including Gil Ra’anan’s Cyberstarts that has backed the company since its founding, Canaan Partners, and Ten Eleven Ventures, also participated in the round.
Axis was founded at the end of 2018 by Dor Knafo, who serves as its CEO and previously worked at Fireglass, which was acquired by Symantec, and Gil Azrielant, who serves as its CTO.
Axis’ Security Services Edge (SSE) offerings enable access to corporate and public-cloud resources, and the company’s cloud-based platform will build on Aruba’s existing Software-defined Wide Area Network (SD-WAN) and network firewall offering.
Cybersecurity giant CrowdStrike acquired Israeli cybersecurity startup Bionic in September for approximately $350 million.
Bionic, which has developed a platform helping organizations operate and protect applications, had raised $83 million in funding previously from investors such as Insight Partners, Cyberstarts, and Battery Ventures. The company raised a $65 million Series B in March 2022.
Bionic was founded in 2019 by CEO Idan Ninyo and CTO Eyal Mamo. Ninyo previously served in the Israeli army's Unit 81 and was also an early employee at Magic Leap. Mamo was in the IDF's Unit 8200 and previously worked as VP R&D at Cymmetria.
Bionic develops a platform that helps IT, operations, and security teams at global financial services, and technology companies operate and protect applications more efficiently. Bionic’s application intelligence platform automatically reverses engineers' applications, delivering a comprehensive inventory with architecture and dataflows, monitoring critical changes in production, and enabling developer guardrails to enforce architecture.
Dig Security, which develops cloud data security solutions, was purchased by Palo Alto Networks in November for $315 million. The startup secured a $34 million Series A investment in September 2022. The round was led by San-Francisco-based venture capital firm SignalFire, with participation from Felicis Ventures, Okta Ventures and Team8. Dig’s Series A brought its total funding to $45 million less than a year after its Seed round in October 2021. Its Seed round included CrowdStrike, through its Falcon Fund, and CyberArk, alongside Merlin Ventures.
Dig was founded in 2021 by Dan Benjamin, Ido Azran and Gad Akuka, three veteran entrepreneurs who’ve previously founded successful companies that were acquired by major firms. They also gained experience at tech giants including Google and Microsoft.
Dig’s DSPM solution helps organizations discover, classify, monitor, and protect sensitive data across all cloud data stores, giving Palo Alto Networks' customers visibility into and control of their multi-cloud data estate. Following the acquisition, Dig’s solution will be integrated into the Prisma Cloud platform to offer data protection from ‘code to cloud’.
