A month after Arora said Israel dominates AI-agent security, Palo Alto is in talks to buy two of its startups
Clutch and Beacon are not among the best-funded names, but a reported $500 million price for Clutch shows what Palo Alto will pay.
Last month, Palo Alto Networks CEO Nikesh Arora said about 40 companies are racing to secure AI agents. CTech's count found at least 20 of them are Israeli-founded. Arora said Palo Alto could wait and buy the winners. A month later, it is reported to be negotiating to buy two of them.
Calcalist reported on Thursday that Palo Alto is in talks to acquire Beacon Security, and that it is negotiating for Clutch Security at about $500 million. TechCrunch, citing a person familiar with the talks, reported that the Clutch price is in cash plus milestone-based payments, and that Clutch's annual recurring revenue is approaching $10 million, about 50 times ARR. Palo Alto has not commented.
Arora's comments, at an ICONIQ fireside chat, were a statement of strategy. He said Palo Alto has its own internal efforts on agent security and may not get it right, and that it could wait six to 24 months to see which teams show the strongest technology, execution and strategy. "I have cash. I have market cap," he said. "So I can go buy them and bring them, make them my team."
Neither target is among the best-funded Israeli companies in the ecosystem. Zenity, which has raised about $185 million, Onyx ($148 million), Reco ($140 million) and Noma ($132 million), have all raised much more. Clutch has raised $28.5 million, and Beacon raised a $13 million Seed round in July.
The two sit on opposite sides of the problem. Clutch secures the credentials and access that agents use, an extension of the identity business Palo Alto bought with CyberArk. Beacon builds agents for security teams to run detection and investigation. Beacon's investors include the founders of Talon, Dig Security and Cider Security, three Israeli startups Palo Alto bought. Palo Alto has acquired 12 Israeli startups since 2014.
Other Israeli companies in the field have also been acquired this year, with Cyera paying $1 billion for Oasis Security, which manages AI agents' access to systems, and Cisco paying roughly $400 million for Astrix.
