The business world is rapidly evolving, with the global pandemic accelerating the shift to remote and hybrid work models. With these changes, comes a greater need for robust cybersecurity measures. Recognising this demand, Check Point Software Technologies Ltd. made a strategic move by acquiring the Tel Aviv-based startup, Perimeter 81.
A Significant Shift in Valuations
Check Point has recently revealed their intention to acquire Perimeter 81, an innovative cybersecurity firm, for approximately $490 million. This acquisition is particularly notable given Perimeter 81’s impressive valuation of $1 billion just over a year ago, following a substantial $100 million Series C funding round.
The acquisition price is intriguing, reflecting broader economic shifts. As interest rates rise and inflation grows globally, tech valuations have taken a hit. This “economic recalibration” has undoubtedly influenced this strategic acquisition, providing Check Point an advantageous position in strengthening its security offerings.
Understanding Perimeter 81’s Value Proposition
Established in 2018, Perimeter 81 has quickly risen to prominence with its specialized network cybersecurity solutions tailored for the hybrid workforce. The cloud-based platform prides itself on simplifying the complexities of cybersecurity, enabling IT departments to better defend both corporate cloud and on-premises networks. Their reach is impressive, boasting collaborations with over 3,000 global clients, including some of the world’s most renowned businesses.
Perimeter 81’s unique solution ensures remote users experience efficient and secure internet browsing, regardless of their location. This not only enhances user efficiency but also addresses pressing concerns related to cloud privacy.
The Rising Need for Enhanced Network Security
The transition to remote work, catalyzed by the COVID-19 pandemic, has spotlighted the critical importance of network security. With the shift of data centers to cloud-based models, businesses are more vulnerable than ever to sophisticated ransomware, malware attacks, and other potential breaches. Tracking remote workers, alongside enhanced security measures, can streamline operations while ensuring data protection.
For Check Point, a firm with a market capitalization exceeding $15 billion, this acquisition represents an opportunity to solidify their position at the forefront of cybersecurity. By incorporating Perimeter 81’s tools into their portfolio, they aim to provide a holistic security solution encompassing remote users, cloud environments, data centers, and broader internet access.
Check Point emphasized the growing demand for security solutions that transcend traditional network perimeters. The integration of Perimeter 81 into Check Point’s Infinity platform is a testament to their commitment to delivering top-tier security through collaborative and consolidated approaches.
A Glimpse into the Future of Cybersecurity
Market research, such as a report by Gartner, suggests the market for secure access service edge (SASE) solutions, like those offered by Perimeter 81, will likely surpass $20 billion by 2026. The acquisition thus positions Check Point to tap into this burgeoning market effectively.
Furthermore, Perimeter 81’s impressive growth trajectory, including its previous funding round led by B Capital and cumulative funding of $165 million, underlines the firm’s potential. With a global presence, including offices in Tel Aviv, Los Angeles, and New York, and a workforce of approximately 250, the company is poised for further expansion.
The anticipated completion of this acquisition in the third quarter of 2023 adds to a growing list of Israeli-based cybersecurity startups being sought after by global tech giants. These acquisitions reflect the escalating security demands of modern businesses, juxtaposed against a backdrop of a more cautious tech funding environment.
Check Point’s strategic acquisition of Perimeter 81 underscores the evolving landscape of work and the paramount importance of cybersecurity in this new era. As remote and hybrid work models become the norm, companies will need to continually adapt and invest in solutions that safeguard their operations, data, and people.