Networking equipment manufacturer Cisco agreed yesterday to acquire Duo Security, a US-based authentication software provider backed by human resources software producer Workday and internet and technology conglomerate Alphabet.
Cisco will pay $2.35bn in cash and assumed equity awards for Duo’s outstanding shares, warrants and equity incentives on a fully-diluted basis. The deal is expected to close by the end of October 2018.
Founded in 2009, Duo Security operates a cloud-based user verification platform that uses two-factor authentication, where a user has to enter a unique, time-limited code in addition to their password, to prevent data breaches, credential theft and unauthorised account takeover.
The technology also assesses the trustworthiness of each device used to log in and restricts access unless both the user has been verified and the device meets company-defined security criteria.
Dug Song, Duo Security’s chief executive, will continue to lead the company once it has been integrated into Cisco’s Networking and Security business.
Duo had raised $117m in total, as of a $70m series D round in October 2017 featuring Workday that valued it at $1.7bn post-money.
The series D round was was co-led by Meritech Capital Partners and Lead Edge Capital and included Geodesic Capital, Index Ventures, Redpoint Ventures and True Ventures.
Alphabet subsidiary GV took part in Duo’s $30m series C round in 2015 alongside True Ventures, Radar Partners and Benchmark.
Benchmark had already led a $12m series B round for Duo in 2014 that included GV, True Ventures and Radar Partners, after the company had received $5m in series A funding from GV, True Ventures and Resonant Venture Partners in 2012.