Cloudflare to Buy Area 1 Security for $162 Million for Email Defense
Cloudflare agreed to purchase Area 1 Security to stop enterprise phishing attacks by uncovering and preemptively eliminating them before they can cause damage.
The San Francisco-based security and performance services provider said Area 1 Security, based in San Mateo, Calif., has long taken a preemptive approach to email security to stop phishing campaigns during early stages of an attack cycle. Meanwhile, Cloudflare entered the email security market last year with tools to manage incoming email routing and prevent email spoofing and email phishing. outgoing emails.
“Email is the single greatest vector of cyberattack on the Internet, making integrated email security essential to any true Zero Trust network,” Cloudflare CEO Matthew Prince said in a statement. “That’s why today we welcome Area 1 Security to help make the Cloudflare platform the undisputed leader in Zero Trust… Together, we plan to deliver the fastest, most efficient and most reliable.”
[Related: Cloudflare Buys Cloud Access Security Broker Startup Vectrix]
Cloudflare will acquire Area 1 Security for approximately $162 million, and the deal is expected to close early in the second quarter of 2022. The company’s stock fell $0.84 (0.92%) to 90.50 $ per share, which is the lowest since Cloudflare’s stock has traded. January 28.
Area 1 Security was founded in 2013, employs 97 people and has raised $82.5 million in five external funding rounds, according to LinkedIn and Crunchbase. In June 2020, the company hired longtime SonicWall marketing and product management leader Patrick Sweeney as CEO, and two months later he hired former SonicWall chief revenue officer Steve Pataky. , to assume the same role in zone 1.
“By combining our core phishing protection and threat intelligence capabilities with Cloudflare’s global network, data capabilities and zero trust platform, we believe that together we can help businesses of all sizes to better secure their entire network infrastructure and better protect themselves against the most destructive cyber risks. “, Sweeney said in a statement.
The two companies have had different philosophies regarding the channel, with Zone 1 growing from virtually none of its business to partners in the spring of 2020 to mapping between 75% and 80% of the company’s business to solution providers within six years. . Area 1 tapped Dawn Ringstaff to be the company’s first-ever Channel Leader and rolled out its first official partner program.
Area 1 Security is today a leading company with more than 100 solution provider partners as the company seeks to bring down the Fortune 500 market. Conversely, Cloudflare only made 11% of its activity (or $45.3 million of $431 million) the channel in 2020, which was up slightly from 9% in 2019 and 7% in 2018, according to Securities and Exchange Commission filings.
“With Cloudflare operating in every corner of the world, Area 1 will be able to deploy and support its solutions globally,” Sweeney said. written in a blog post. “Cloudflare has pioneered global scalability and Cloudflare will integrate Area 1’s technology into its global network to provide customers with the most comprehensive Zero Trust security platform available.”
Cloudflare implemented Zone 1 to protect its own employees in early 2020 and the results have been fantastic, with a significant and prolonged drop in phishing emails, Cloudflare Chief Technology Officer John Graham-Cumming written in a blog post. Specifically, he said Zone 1 enabled Cloudflare to proactively identify phishing campaigns and take action against them before they cause harm.
The additional Zone 1 had little to no impact on email productivity, meaning there were minimal false positives distracting Cloudflare’s security team, according to Graham-Cumming. The company has built a massive data platform that can identify patterns in emails, such as where they came from, what they looked like and their IP address, Graham-Cumming said.
The company’s nine years in the email security space has allowed Area 1 to amass an incredibly valuable wealth of threat intelligence data, Graham-Cumming said. Area 1 also used the data to train state-of-the-art machine learning models to act preemptively against threats, Graham-Cumming said.
“Area 1’s technology was so effective at launch that our CEO reached out to our security director to find out if our email security was broken,” Graham-Cumming wrote. “It turns out our employees weren’t reporting any phishing attempts because Zone 1 was picking up all the phishing attempts before they reached our employees’ inboxes.”
The Area 1 acquisition comes just 13 days after Cloudflare purchased Vectrix to detect and mitigate issues such as inappropriate file sharing and misconfigurations of user permissions in AWS, Google Workspace and GitHub. Two months earlier, Cloudflare bought startup Zaraz to increase website speed and security without sacrificing privacy by reducing the impact of third-party marketing and analytics tools.
A year prior, Cloudflare acquired automation platform Linc for an undisclosed sum to help front-end developers collaborate and build powerful apps. And in January 2020, Cloudflare purchased early-stage browser isolation provider S2 Systems for $17.7 million to keep security threats away from devices and make everyday web browsing safer and more secure. quick.
In total, Cloudflare has made nine acquisitions since its inception nearly 13 years ago, according to Crunchbase.