Drata Acquires Safebase for $250M - Expanding Security Compliance

Drata Acquires SafeBase for $250 Million

Drata, a platform automating security compliance for frameworks like SOC 2 and GDPR, has completed the acquisition of SafeBase, a software security review startup, in a deal valued at $250 million.

Leadership and Product Continuity

The co-founders of SafeBase, Al Yang (CEO) and Adar Arnon (CTO), will continue in their current positions. SafeBase will maintain its functionality as a standalone product while integrating its core technologies into the Drata platform.

Yang emphasized that this acquisition represents more than just a product combination. He described it as a merging of two companies deeply focused on customer satisfaction, sharing similar values and goals, and dedicated to providing enterprises with the necessary tools for success.

SafeBase's Origins and Functionality

Yang and Arnon established SafeBase in 2020 following their time together at Harvard Business School. The company received initial support from Y Combinator and focuses on streamlining the process of completing security questionnaires.

These questionnaires are typically initiated by organizations before adopting new software solutions. SafeBase utilizes AI models, specifically trained for security documentation, to analyze security information and questions.

The system then automatically generates responses to these questionnaires. Furthermore, SafeBase offers an engine for defining rules-based access control and provides dashboards displaying insights into a company’s overall security posture.

Funding and Customer Base

Prior to the acquisition, SafeBase secured $53.1 million in venture funding from investors including Zoom Ventures, NEA, and Comcast Ventures. Currently, SafeBase serves over 1,000 customers, including prominent companies like LinkedIn, Palantir, and CrowdStrike.

Drata's Strategic Rationale

According to Drata’s co-founder and CEO, Adam Markowitz, the acquisition of SafeBase is driven by the increasing demand for robust trust management solutions. The growing reliance on third-party applications and AI, coupled with access to sensitive data, necessitates stronger security measures.

New regulations, such as the Digital Operational Resilience Act in the EU, are also imposing stricter security requirements on vendors.

A Unified Trust Ecosystem

Markowitz envisions SafeBase as a key component in building a “seamless ecosystem” encompassing trust, governance, risk, and compliance. He stated that this acquisition reinforces Drata’s commitment to empowering customers to establish and expand trust, foster growth, and achieve their objectives.

Drata's Growth and Previous Acquisitions

Founded in 2020, Drata has experienced significant growth, raising over $300 million in funding and acquiring more than 7,000 customers, including Notion and Tenable. Its investors include Iconiq Growth, Salesforce Ventures, Microsoft CEO Satya Nadella, and former LinkedIn CEO Jeff Weiner.

Last year, Drata’s revenue doubled, and the company was adding approximately 650 new customers each quarter. Drata previously acquired Harmonize.io, a governance and automation firm, in April and Oak9, a cloud security platform, in May.

Financial Performance and Workforce Adjustments

Drata is reportedly approaching $100 million in annual recurring revenue. However, the company experienced a workforce reduction of around 40 employees, representing 9% of its staff, last September.

The company cited a focus on “sustainable growth” as the reason for the layoffs, despite a substantial 52% increase in headcount from 2023 to the previous year.