CyberArk Acquires Zilla Security for Up to $175M

CyberArk Acquires Zilla Security for Up to $175 Million

CyberArk, a leading identity security firm, has completed the acquisition of Zilla Security, an identity governance and administration (IGA) platform. The deal's value reaches up to $175 million.

Deal Structure and Financial Details

The acquisition includes an initial cash payment of $165 million. An additional $10 million is designated as an “earn-out” payment. This earn-out is contingent upon the achievement of specific, predetermined milestones.

This structure serves as an incentive for key personnel, such as founders, to remain with the company during the integration process.

CyberArk's Background and Acquisition History

Established in 1999 and headquartered in Boston, CyberArk focuses on access management solutions. A core competency is privileged access security, designed to safeguard sensitive data and critical infrastructure.

Prior to this, CyberArk has completed eight acquisitions. The most substantial was the $1.54 billion purchase of machine identity company Venafi in the previous year.

Zilla Security: A Cloud-Native Approach

Zilla, also based in Boston, operates within the identity and access management space. Founded in 2019, Zilla distinguishes itself as a more agile, cloud-native organization.

The company has integrated automation and artificial intelligence (AI) capabilities into its platform. This made Zilla an attractive target for CyberArk, a company with origins predating the widespread adoption of SaaS and cloud computing.

Statements from Leadership

Deepak Taneja, CEO and co-founder of Zilla, stated that approaches effective two decades ago are no longer sufficient in today’s security landscape.

Zilla's Funding and Backers

Since its founding six years ago, Zilla had secured approximately $19 million in funding. Investors included FirstMark, Pillar VC, and Tola Capital.

This acquisition strengthens CyberArk’s position in the evolving identity security market.

Transforming Identity Governance Strategies

Essentially, CyberArk aims to enhance its existing offerings with tools specifically designed for cloud environments, leveraging AI and providing seamless integration across hybrid and multi-cloud infrastructures.

According to a statement by CyberArk CEO Matt Cohen, integrating Zilla’s advanced Identity Governance and Administration (IGA) features into the CyberArk Identity Security Platform will redefine identity governance. This will be achieved through scalable automation, strengthening compliance and maximizing security for contemporary organizations.

CyberArk has been actively pursuing modernization for some time. The company’s initial public offering on the Nasdaq in 2014 has been followed by substantial growth, with share prices exceeding the IPO value by over 1,000%.

In the last year alone, the company’s valuation has increased by 41%, reaching a total of over $18 billion. Recent Q4 results demonstrated a 41% year-over-year revenue increase.

Subscription revenue experienced particularly strong growth, rising by 62%, and the company’s annual recurring revenue (ARR) has now exceeded $1 billion.

Following this acquisition, CyberArk will provide core Zilla services, such as Zilla Comply and Zilla Provisioning, as independent products within the CyberArk identity security platform.

Furthermore, Zilla’s co-founders, Deepak Taneja and Nitin Sonawane, along with their team, will be integrated into CyberArk.

Key Benefits of the Acquisition

• Enhanced cloud capabilities for identity security.
• Scalable automation for improved compliance.
• Increased security for modern enterprises.
• Expansion of the CyberArk Identity Security Platform.
• Integration of experienced personnel from Zilla.

The integration of Zilla’s technology is expected to provide significant benefits to CyberArk’s customers, streamlining identity governance processes and bolstering overall security posture.