Cyera has acquired Trail Security for $162 million and is currently raising funds at a $3 billion valuation.

Israel-founded, U.S.-based cybuc unicorn Cyera uses artificial intelligence to create what's referred to as data security posture management
Cyera has acquired Trail Security for $162 million and is currently raising funds at a $3 billion valuation.

Israel-founded, U.S.-based cybuc unicorn Cyera uses artificial intelligence to create what's referred to as data security posture management — a comprehensive view and picture of where a customer's data has been created, where it is stored, and how it is used. It has been on a growth tear in the last year, as the company picks up business as breaches continue to come out across an increasing number of enterprises and other large organizations. Now, Cyera takes the subsequent steps to its expansion with its first acquisition and a big fundraise on the horizon. The acquisition is of Trail Security, a startup that is still in stealth mode building solutions in areas related to data loss prevention — pretty much complementary technology to posture management that helps one secure data if there's a breach. Cyera is paying $162 million for Trail in a mix of cash and shares, according to Cyera CEO and co-founder Yotam Segev, interviewed by TechCrunch.

So far, Cyera has been adding to its substantial customer roster in the healthcare, communications and financial services industries, although they won't disclose names, and one of their investors is AT&T. There is, therefore, revenue coming in. It still also has some cash left over from those previous rounds. The latest was a $300 million Series C at $1.4 billion valuation in April 2024.

But soon it will soon be getting more. We have also confirmed with sources close to the matter that Cyera is in the process of raising at least $200 million at a pre-money valuation of around $3 billion. Cyera declined to comment on fundraising.

The deal will help Cyera build its offerings to cater to demands from customers to handle the longer process that comes after posture management engagement, namely, also to offer a more complete suite of services as compared to others in the field. Competitors to Cyera include CrowdStrike, Zscaler, Rubrik, Wiz, Palo Alto Networks, and Fortinet.

Trail is a pretty young company—only one year old and still operating in stealth mode, if you look at its thin website and Zohar Wittenberg's status as CEO and co-founder hadn't even allow him to make the company 'LinkedIn official.' But in fact, it already raised quietly $35 million in funding, Segev told me, including a Series A from Lightspeed, CRV, and Cyberstarts—the early-stage backer who invested in a whole wave of big-name Israeli cybersecurity companies like Wiz and Cyera.

It had some momentum, so why throw in the towel so fast? Wittenberg told me it was for two main reasons.  First, it's the state of the security market, where buyers are currently favouring platform plays — with 'all in one' offerings, over point solutions.

"We feel we're building the best product in the category, but I feel the customers wanted to buy data loss protection and data security posture management as one platform," Wittenberg said in an interview. "We can leverage the DSPM side and build it better.".

The other reason is that Segev and Wittenberg have known each other for years back to school and sort of felt like an easy choice for both parties involved when it came to a culture fit.

Going forward, Cyera's focus is going to be on continuing to improve its own technology­—AI might be the startup's preferred weapon for data collection and protection, but it is also the favorite of many malicious hackers to come up with novel ways of breaching networks­—but it is also going to make more acquisitions going forward to respond to increasing demands of customers to do more.

"You have no idea how many times a month I get a phone call from a CISO asking delicately for some time," Segev told me back in April.

"'I've got something going on.'

'I need you. How fast can you guys scan my environment?' It happens every time. And what we do is, we jump on it.". We send a team, we get them to determine what data was within scope. They wouldn't even know what data was breached." Trail has 40 employees and all of them are coming on board with Cyera.

 

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2024-10-17 17:53:45