F5 Networks splurges $1bn on AI security firm
Shape Security's AI-based platform will be integrated into the vendor's application protection services
F5 Networks has agreed to acquire US-based AI specialist Shape Security for $1bn in cash.
US-based Shape Security was founded in 2011 and is a platform based on AI, machine learning and analytics to protect against attacks that bypass other security and fraud controls.
It has received $183m through six series in outside investment before being acquired by F5 and counts large banks, retailers, airlines and US government agencies among its customers.
F5 expects the acquisition to bolster its portfolio of application security services, which specialise in protecting applications across multi-cloud environments. It claimed that the combination of both companies' offerings could potentially save billions in fraud, reputational damage or costly disruptions to critical online services.
F5's location in the data traffic flow is an ideal insertion point for Shape's services, the company stated, adding that this will "dramatically" reduce the time and resources for organisations to deploy online fraud and abuse protection.
"We know from the companies we work with that applications are critical to running their business. To drive maximum business value and the best experiences for their customers, these apps need to perform flawlessly while protecting data security and user privacy," said François Locoh-Donou, F5 CEO.
"When a website or application experience is degraded by web fraud and abuse, the result is lost revenue, lost brand equity and customers jumping ship to the competition.
"With Shape, we will deliver end-to-end application protection, which means revenue-generating, brand-anchoring applications are protected from the point at which they are created through to the point where consumers interact with them—from code to customer.
"Beyond opening a fast-growing $4bn adjacent market, Shape's machine learning and AI-powered capabilities will scale and extend F5's broad portfolio of application services and expand our ability to optimise and protect customers' applications in an increasingly complex multi-cloud world."
The deal dwarves the $670m F5 spent on open source software vendor NGINX earlier this year.
Shape's leadership team, including co-founder and CEO Derek Smith, will join F5 in management positions upon the deal's close.
Smith stated: "Since Shape's inception, we observed a consistent pattern in customer after customer: the use of F5 technology to deliver and enable their applications.
"Now, we look forward to the opportunity to deeply integrate into F5's platform for application delivery and security - F5 provides the optimum traffic flow insertion point for Shape's industry-leading online fraud and abuse prevention solutions.
"This, combined with F5's global go-to-market scale, means we can jointly protect significantly more customers' applications and users from sophisticated attacks and malicious traffic."