Zscaler buys Avalor to bring more AI into its security tools

Cloud security company Zscaler, based in San Jose, California, has acquired cybersecurity startup Avalor for $310 million in cash and equity. The acquisition aims to enhance Zscaler’s platform by integrating capabilities such as streamlined reporting of security incidents, incident mitigation, asset discovery, data classification, and security policy generation. Avalor, founded by Raanan Raz and Kfir Tishbi, serves as a central hub for cybersecurity data aggregation, normalization, and risk tracking. Known for its ability to handle data from various sources and formats, Avalor offers unique vulnerability risk management tools.

With previous funding of $30 million from investors like TCV and Salesforce Ventures, Avalor anticipates significant growth opportunities under Zscaler’s umbrella. The acquisition marks Zscaler’s third strategic move after acquiring Canonic and Trustdome. Founded in 2007, Zscaler, which went public in 2018, operates with approximately 7,000 employees and a market cap of around $30 billion.

Zscaler’s acquisition of Avalor comes amid a relatively slow cybersecurity M&A market, with only 66 such deals involving VC-backed startups recorded last year. The cybersecurity landscape has seen increased activity in 2024, with notable mergers and acquisitions by companies like Wiz, SentinelOne, and CrowdStrike. The industry is witnessing a trend of consolidation and strategic acquisitions as companies seek to expand their offerings and capabilities in the evolving cybersecurity landscape.