A few weeks ago, TechCrunch broke the news that Akamai was in talks to acquire API security specialist Noname Security for around $500 million. Today, the deal was confirmed, albeit at a slightly lower price. Akamai on Tuesday he said he agreed to buy Noname in $450 million deal.
The deal underscores the ongoing push for more consolidation in the cybersecurity market. The past several years have seen the emergence of a wide variety of cybersecurity startups. But some of these companies have struggled to scale, raise money or sell to customers looking for one-stop shops to manage multiple security needs, so the bigger players are picking up the smaller and more promising ones.
Sometimes, this is at a steep discount. Noname was valued at $1 billion in its last private fundraising in December 2021, so it’s selling for less than half that price.
That’s not even the worst discount, though: Wiz was in advanced talks to acquire Lacework Security for $168 million, down from the smaller company’s previous valuation of $8.3 billion. However, this deal fell through due diligence.
Akamai said it will integrate Noname into its API Security business and expects the acquisition to generate about $20 million in revenue in fiscal 2024.
“Applications run our world, but as applications and users proliferate, so do security risks,” Mani Sundaram, EVP and general manager, Security Technology Group, Akamai Technologies, said in a statement. “Akamai has seen a growing need for API protection with our own data showing a 109% year-over-year increase in API attacks. With the addition of Noname, Akamai believes it will have the breadth of integrations and deployment options needed to provide comprehensive API protection for customers in all environments.”
Akamai’s focus, the company said, is on giving developers and security operations teams more tools to discover “shadow” APIs as well as other vulnerabilities.
The deal is expected to close in the second quarter of 2024.
“API deployment continues to proliferate as customers prioritize their investments in application modernization and digital transformation initiatives,” said Oz Golan, CEO and co-founder of Noname. “Combining Noname with Akamai’s API Security offering will provide a solution for every type of customer. No matter where the customer’s applications reside—whether in the cloud, at the edge, on-premises, or on other vendor platforms—they will be protected.”
Golan and the remaining 200 employees of the San Jose company are expected to join Akamai as part of the deal.
