Internet conglomerate Alphabet’s growth equity arm, CapitalG, agreed to pay $100m as part of an acquisition at $1.1bn valuation of France-based cybersecurity software provider Armis by growth equity firm Insight Partners. Insight Partners put up most of the money in the transaction, with “rollover” from undisclosed existing investors in the company. Rollover equity occurs when certain equity holders in a company, including founders or key members of management, roll a portion of their ownership stakes over into a new capital structure set up by an acquiring private equity firm instead of receiving cash proceeds. Armis will continue to operate independently and will be fully managed by its two co-founders, Yevgeny Dibrov and Nadir Izrael. Previous backers of the company included venture capital funds Iris Capital, Red Dot Capital Partners and Bain Capital Ventures, the VC arm of private equity firm Bain Capital, as well as Tenaya Capital and Sequoia Capital.
Founded in 2015, Armis has developed security software for enterprises operating internet-of-things (IoT) or unmanaged devices, such as mobile devices, smart televisions or full-scale industrial or building systems.
The company is part of the broader IoT space, which has received much attention from corporate venture investors, as our GCV Analytics chart shows. Over the past decade, corporate-backed rounds in emerging IoT businesses reached a peak in numbers in 2015 (180) and then went back down in subsequent years. However, the top in total capital raised in those rounds was reached in 2018 ($5.65bn), though the figure went down to $3.74bn in 2019.
