Schwarz Group Acquires XM Cyber for $700 Million

Schwarz Group Acquires XM Cyber for $700 Million

Schwarz Group, a retail organization headquartered in the European Union, has announced the acquisition of XM Cyber, an Israeli cybersecurity startup, in a deal valued at $700 million. This acquisition may appear unconventional, considering Schwarz Group’s primary business as the parent company of Lidl and Kaufland supermarkets.

However, the company anticipates that expanding into the security sector will ultimately provide benefits to its core retail operations.

XM Cyber's Core Functionality

XM Cyber assists organizations in simulating potential cyberattacks. This process is designed to identify weaknesses and vulnerabilities within a company’s security infrastructure.

The goal is to proactively address and eliminate these vulnerabilities before they can be exploited by malicious actors.

Schwarz Group's Rationale

Christian Müller, Chief Information Officer at Schwarz Group, emphasized the necessity of bolstering security capabilities, particularly with the increasing shift towards online shopping.

“Proactively protecting networks by identifying and closing security gaps from an attacker’s viewpoint represents a groundbreaking approach,” Müller stated. “XM Cyber’s solution complements our existing robust IT security measures, enhancing protection for our customers, partners, and the company itself.”

XM Cyber's Perspective on the Acquisition

Noam Erez, CEO and co-founder of XM Cyber, highlighted the advantages of joining a large corporation, even one not traditionally focused on technology.

“This acquisition, backed by Schwarz Group’s financial resources, will enable us to accelerate product development, expand our reach globally, and scale our operations for the benefit of XM Cyber customers,” Erez explained.

Operational Continuity and Future Outlook

Under the terms of the agreement, XM Cyber will continue to function as an independent entity. All 110 employees will retain their positions, suggesting minimal disruption for existing customers.

Customers may potentially benefit from the resources of the larger parent company, as indicated by Erez. However, some may express reservations about being affiliated with a non-technology-centric organization.

Company Background and Funding

Founded in 2016, XM Cyber had previously raised $49 million in funding, as reported by Crunchbase. The most recent funding round, a $17 million Series B, was completed in July and led by Macquarie Capital.

The acquisition signifies a growing trend of retail companies investing in cybersecurity to safeguard their operations and customer data in an increasingly digital landscape.