Cybersecurity software producer Palo Alto Networks agreed to acquire US-based cybersecurity orchestration software developer Demisto for $560m. The stock-and-cash deal gave exits to two corporate investors – IT services firm Wipro and enterprise communication software producer Slack. Demisto had previously raised $69m in equity funding. The acquisition is subject to regulatory approval and is expected to complete during the third quarter of this year. Wipo and Slack had participated through their respective venturing subsidiaries, Wipro Ventures and the Slack Fund, in a $20m series B round in 2017.
Founded in 2015, Demisto has developed a software platform orchestrating the cybersecurity process, automating basic functions while feeding into input from human analysts. The platform employs machine learning to gain knowledge from historical data on previous interactions. The company currently counts more than 150 customers whom it will go on serving.
The interest of corporate venture investors in the cybersecurity space has undoubtedly piqued in recent years, as the GCV Analytics bar chart below suggests, driven by the increasing digitisation of virtually all sectors of the economy, which also entails heightened risks of cyberattacks. In 2018, there was a record number of deals (97) featuring at least one corporate investor in syndicates, worth an estimated $2bn.
