Zscaler to acquire security startup Avalor: report

Cybersecurity star Zscaler is seeking to buy Israel-based security startup Avalor, which would be the company’s fifth purchase of a startup since 2021.

Cybersecurity superstar Zscaler is reportedly in negotiations to buy Israel-based startup Avalor for approximately $300m, which would mark the company's fifth acquisition of a cybersecurity startup over the past few years.

The $2bn San Jose, California-based company is looking to acquire the security startup for between $250m and $350m, according to a report by Calcalist.

Zscaler is a 6,000-employee-strong security company that generates more than $2bn in annual revenue. Zscaler stock is currently trading at $240.85 per share as of Tuesday morning with a market cap of $35.7bn.

Zscaler founder and CEO Jay Chaudhry said he's targeting a $5bn annual recurring revenue goal for the company in the coming years thanks, in part, to a revamped channel partner strategy.

Avalor and Zscaler could not be reached by press time.

Who Is Avalor?

In April 2023, Avalor emerged from stealth mode with $30m in a Series A funding round. Investors included Salesforce Ventures and TCV.

Avalor provides a data fabric to integrate disparate data pipelines using automated services and APIs. Its open data platform can integrate disparate data from legacy systems, databases, applications or any source of data to provide a holistic view of businesses performance.

The startup said its Avalor security platform acts as a "source of truth" for assets, controls, identities, vulnerabilities, security bugs and other related data points. The offering automatically groups multiple findings, alerts and vulnerabilities to match the way a customer's organization works.

Avalor was founded by Kfir Tishbi and Raanan Raz, who have executive experience working for Datatroma and CitiBank. Datatroma was purchased by Salesforce in 2018 for $820m.

Zscaler's startup acquisitions

Zscaler's most recent acquisition was in early 2023 with the purchase of Canonic, a startup focused on protecting against attacks that target Software as a Service, as concerns grow about the security of data in SaaS applications.

In November 2022, Zscaler acquired Shiftright, a Silicon Valley-based startup specializing in closed loop security workflow automation.

In 2021, Zscaler purchased Israel-based startup Trustdome, as well as security startup Smokescreen.