Israeli IoT security firm Armis confirmed late Monday that it agreed to be acquired by NY-based Insight Partners at a company valuation of $1.1 billion.
Under the terms of the agreement, Insight will acquire the company for cash with participation from CapitalG, formerly Google Capital, for $100 million and rollover from certain existing stockholders subject to customary conditions and approvals, Armis said.
Insight Partners had participated in a Series C funding round of $65 million for Armis last April, bringing the total capital raised by the company to over $110 million. That round was led by Sequoia Capital. Google is also a previous investor in Armis.
The deal represents the first billion-dollar exit for an Israeli company in 2020.
Following the acquisition, Armis will continue to operate independently and will be fully managed by its two co-founders, Yevgeny Dibrov, CEO, and Nadir Izrael, CTO, and the executive team, the company indicated.
Armis was founded in 2015 by Izrael, Dibrov and Tomer Schwartz (no longer with the company), and is headquartered in Palo Alto, California and Tel Aviv. Armis says its solution eliminates IoT security blind spots, letting enterprises embrace IoT as part of their digital transformation and develop full visibility and control over the IoT devices that operate within their networks. Armis’ security solution analyzes and classifies these devices in order to identify risks or potential cyber attacks. The company’s customers have included Mondelēz, Sysco Foods, Allergan and Samsung Research America.
“Insight is one of the most sophisticated software investors in the sector, and it is due to the depth of their domain expertise that they really understand the enterprise IoT device challenge we are looking to solve, and the size of the market opportunity,” said Dibrov in a company statement.
“We considered growth rounds and strategic offers, but by partnering with Insight we have the best of both worlds – operational support and independence, both of which were important in our decision to take on a scaleup partner this early in our company journey,” he added.
“Armis is one of the most ground-breaking enterprise data-centric security solutions that is actively protecting modern businesses today,” said Jeff Horing, Managing Director at Insight. “We see the huge problem they are solving. Armis has established themselves as the leader in the enterprise IoT security space, and we believe this team and their technology will continue to transform the way unmanaged devices are secured.”
Teddie Wardi, Managing Director at Insight, said: “The strength of Israeli security software is unquestionable, and we are thrilled to be the scaleup partner Armis has selected to continue their explosive growth journey. In a world of unmanaged devices, Armis’ technology is a game-changer,” he said.
Gili Raanan, chairman of Armis and general partner at Sequoia Israel and Cyberstarts said, “Armis is the largest Israeli cybersecurity acquisition of a private company ever and this is an important milestone in the Armis journey, building a substantial stand-alone cybersecurity power-house.
Raanan, Horing, and Wardi will serve on the Armis Board of Directors as part of the acquisition deal.
In 2017, Armis alerted tech giants Google and Amazon of potential cyber breaches in their smart speaker products with vulnerabilities set to affect over 20 million users at the time. Armis researchers had uncovered an exploit over Bluetooth that would allow hackers to take over devices and spread malware. Both companies released security updates for their respective Google Home and Amazon’s Alexa devices.