Israeli cybersecurity firm Illusive Networks, a developer of deception technology used to detect targeted hacker attacks, has entered into an agreement to be bought by US cybersecurity firm Proofpoint Inc. for an undisclosed sum.
The acquisition will allow Proofpoint to strengthen its “threat and information protection platforms by adding proactive identity risk discovery and remediation as well as a strong post-breach defense capability,” to better protect enterprises from cyberthreats such as ransomware and identity-based data breaches, the firm said in a statement.
Financial details of the transaction were not disclosed but the deal value is estimated at $100 million to $150 million, according to a report in the Hebrew press. The closing of the transaction is expected in January 2023, the US firm said, subject to closing conditions and regulatory approvals.
Founded in 2014 by Ofer Israeli, a research and development veteran of Check Point Software Technologies, Illusive is the first company launched by cybersecurity foundry Team8, which has deep ties to the Israeli army’s tech-savvy unit 8200.
Illusive’s software prevents cyberattacks by taking away the one thing attackers need to succeed – access to privileged identities, the firm says.
To date, the cybersecurity company has raised a total of $54 million from investors including Microsoft Ventures, New Enterprise Associates, Bessemer Venture Partners, Citi Ventures, Cisco Investments, and Eric Schmidt’s Innovation Endeavors, according to Start-Up Nation Central, which tracks the Israeli tech industry.
The acquisition comes amid a global increase in cyberattacks on enterprises as hackers are shifting their tactics and focus to identity-based attacks, Sunnyvale, California-based Proofpoint remarked. About 84% of organizations fell victim to an identity-related breach over the past year up from 79% in 2021, according to the 2022 Trends in Securing Digital Identities report.
“It’s currently far too easy for an attacker to turn one compromised identity into an organization-wide ransomware incident or data breach,” said Ryan Kalember, Proofpoint’s executive vice president of cybersecurity strategy. “The acquisition of Illusive reinforces Proofpoint’s commitment to innovation and growth, bringing market-defining technology to make threat actors’ jobs as difficult as possible.”
Illusive has pioneered a new paradigm of cybersecurity tech in which an invisible layer of security is overlaid on a system, set up to counter hackers who are able to breach traditional defenses. Finding data thus becomes an elusive task for hackers, because they are distracted by illusory data points that are designed to lead them in the wrong direction. When attackers act upon the false information, Illusive neutralizes the attack and triggers a detailed breach report enabling security administrators to detect, track and contain the attack in its early stages.
“Illusive is solving a problem that others cannot by focusing on protecting identity security vulnerabilities and stopping the menace of ransomware, which has galvanized worldwide demand for our solution,” said Illusive founder and CEO Israeli.
This is the fourth acquisition by Proofpoint in Israel after buying Israeli-founded ObserveIT, a maker of software that identifies insider cybersecurity threats, in 2019. The firm acquired FireLayers, focused on cloud security, in 2016, and MetaNetworks, which secures access networks.
Proofpoint has developed software to help firms protect their assets by protecting their employees at their entry points. Founded by Eric Hahn in 2002, the firm’s technology is used by 75% of Fortune 100 companies. It employs more than 3,600 employees serving over 8,000 enterprises worldwide, according to the company website.
In 2021, Proofpoint was acquired by Thoma Bravo, a private equity software investing firm, in a deal valued at $12.3 billion.