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Zscaler Buys Avalor to Revolutionize AI in Security

ByHuey Yee Ong

Mar 17, 2024
Zscaler Buys Avalor to Revolutionize AI in Security

Zscaler, a frontrunner in cloud security headquartered in San Jose, California, has acquired the cybersecurity startup Avalor. This move, costing Zscaler a hefty sum of $310 million in both cash and equity, comes just 26 months after Avalor’s founding. This strategic acquisition aims to integrate Avalor’s innovative AI technologies into Zscaler’s extensive security platform, marking a pivotal step towards revolutionizing AI applications in security measures.

Zscaler’s acquisition of Avalor is not just a financial transaction but a blend of technological and strategic enrichment. Jay Chaudhry, the founder and CEO of Zscaler, emphasized the acquisition’s value in his announcement. He outlined the enhancements this deal brings to Zscaler’s platform, such as advanced incident reporting, effective mitigation strategies, comprehensive asset discovery, and precise data classification, alongside generating robust security policies.

Chaudhry stressed the importance of quality data in AI’s success, stating, “AI is only as good as the underlying data.” He highlighted that Zscaler’s acquisition of Avalor leverages the world’s largest security cloud to train AI models specifically designed for security, enhancing their capability to identify vulnerabilities and predict as well as prevent potential breaches more effectively.

What Makes Avalor Stand Out in Cybersecurity?

Avalor, co-founded by Raanan Raz and Kfir Tishbi, has carved a niche for itself in the cybersecurity ecosystem. Tishbi, who had previously spearheaded the engineering team at Datorama (acquired by Salesforce in 2018), brought his expertise to Avalor, creating a platform that serves as a central hub for cybersecurity data.

Avalor’s platform excels in several areas:

  • Data Aggregation: Avalor aggregates risk data from various sources.
  • Normalization: It normalizes data to ensure consistency.
  • De-duplication: Avalor removes duplicate data entries for accuracy.
  • Risk Tracking: Tracks risk data from discovery through to remediation.
  • Data Processing: Capable of handling data in any format.
  • Vulnerability Management: Offers unique tools for risk management and prioritization.

How Will Avalor Evolve with Zscaler’s Support?

Before being acquired by Zscaler, Avalor attracted significant investment, securing $30 million from notable investors, including TCV, Salesforce Ventures, Jibe Ventures, and Cyberstarts. The acquisition by Zscaler presents Avalor with unparalleled growth opportunities, as highlighted by Raz in a blog post. He pointed out the advantages of instant access to Zscaler’s vast resources, including a massive 7,000 customer base, a global network of 4,200 channel partners, and the backing of a $2 billion enterprise. Raz assured that Avalor would continue its operations independently while benefiting from the “tailwinds” of Zscaler’s resources.

This acquisition is Zscaler’s third, following its purchases of Canonic and Trustdome, and underscores the company’s ongoing commitment to bolstering its cybersecurity offerings. Since its inception in 2007 by Chaudhry and K. Kailash, and its subsequent public offering in March 2018, Zscaler has grown to employ approximately 7,000 employees and boasts a market capitalization of about $30 billion.

The cybersecurity mergers and acquisitions (M&A) landscape has witnessed a notable slowdown in recent years. According to data from Crunchbase, the number of M&A deals involving VC-backed cybersecurity startups dropped by 26% from 2022 to the previous year, with a more significant decline observed from the peak in 2021. However, the acquisition of Avalor by Zscaler, alongside other significant deals in the sector, could signal a rejuvenation of activity in the cybersecurity M&A market, suggesting an optimistic outlook for innovation and collaboration in the field.

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Featured Image courtesy of metamorworks via Getty Images/iStockphoto

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.

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