Zscaler Acquires Cybersecurity Startup Avalor To Boost AI Data Capabilities

Security giant Zscaler has acquired startup Avalor with bold plans to transform AI capabilities for the cybersecurity industry.

AI is only as good as the underlying data, and many solutions lack the additional context and knowledge from data sources across the enterprise to truly leverage security-specific AI models,” said Zscaler founder and CEO Jay Chaudhry in a statement Thursday.

“Zscaler operates the world’s largest security cloud with the most relevant data to train security-specific large language models, and with the Avalor acquisition we can more effectively identify vulnerabilities, while predicting and preventing breaches,” Chaudhry said.

The financial terms of the deal were not disclosed. However, reports earlier this year suggested the purchase price for Avalor was between $250 million and $350 million. The cybersecurity acquisition officially closed March 13.

Zscaler’s Plans For Avalor

San Jose, Calif.-based Zscaler is a 6,000-employee-strong security company that generates more than $2 billion in annual revenue. Israel-based Avalor emerged from stealth mode in April 2023 with $30 million in a Series A funding round with investors including Salesforce Ventures and TCV.

Zscaler plans to extend its Zero Trust Exchange with Avalor’s Data Fabric for Security, which has over 150 prebuilt integrations enabling customers to proactively identify and predict critical vulnerabilities as well as improve operational efficiencies.

Avalor’s Data Fabric for Security ingests, normalizes and unifies data across enterprise security and business systems to deliver actionable insight, analytics and operational efficiencies. By expanding Zscaler’s Zero Trust Exchange platform with a security-centric data fabric, Zscaler looks to enable customers to significantly enhance and fully automate AI-driven analytics and decision-making in real time without the complexity of data aggregation and collection.

Avalor CEO: Zscaler-Avalor In A ‘Prime Position’

Avalor CEO Raanan Raz said the combined company will be in a ‘prime position” to lead the vulnerability management and data security market.

“We have long understood that being able to make sense of all the disparate security data sources in an organization is essential to understanding and improving risk posture, that’s why we delivered the industry’s first Data Fabric for Security to provide that aggregated platform,” said Raz in a statement.

“The first application running on our Data Fabric is our Unified Vulnerability Management [UVM] module. By combining the Zscaler proprietary data sets with the 150 third-party sources Avalor supports, we will be in a prime position to enhance our UVM capabilities and create new applications with additional cyber protection insights,” Avalor’s CEO said.

In early 2023, Zscaler acquired Canonic, a startup focused on protecting against attacks that target Software as a Service.

Zscaler’s purchase of Avalor was paid predominantly in cash, with a portion delivered in the form of equity subject to vesting conditions.

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