Palo Alto Networks in talks to acquire Israeli startup Clutch Security for $500 million
The three-year-old company develops software to track and secure the credentials used by AI agents. If completed, the deal would be Palo Alto's fifth announced acquisition this year as CEO Nikesh Arora steps up the company's push into AI security.
Cybersecurity giant Palo Alto Networks is in talks to acquire Israeli startup Clutch Security for approximately $500 million, according to a report by The Information, citing people familiar with the negotiations.
If finalized, the deal would be Palo Alto's fifth announced acquisition this year, as CEO Nikesh Arora steps up efforts to expand the company's defenses against emerging AI-related threats. Clutch develops software that helps organizations track and secure the passwords, authentication codes and other credentials used by AI agents to access corporate systems.
Founded in late 2023, Clutch was established by CEO Ofir Har-Chen, CTO Sagi Haas and VP of R&D Tal Kimhi. The company focuses on non-human identities, the digital credentials and permissions that allow software systems, applications and automated tools to communicate with one another. These include API keys, service accounts, tokens and passwords.
As companies increasingly deploy AI agents capable of accessing internal systems, handling sensitive information and carrying out tasks autonomously, the number of digital identities and permissions they use is growing. That creates a new security challenge: organizations must be able to identify which agents have access to their systems, what they are authorized to do and whether those credentials are being misused.
Clutch's platform allows organizations to map non-human identities across their environments, identify excessive or exposed permissions, manage credentials throughout their lifecycle and detect suspicious activity. The company is extending these capabilities to address the growing use of AI agents, whose access to corporate data and applications can create new vulnerabilities if not properly controlled.
The startup has raised approximately $28.5 million across two disclosed funding rounds. In July 2024, it secured an $8.5 million Seed round led by Lightspeed Venture Partners, with participation from Merlin Ventures and private investors including Shlomo Kramer, Exabeam co-founder Nir Polak and HashiCorp co-founder Armon Dadgar.
In January 2025, Clutch raised a further $20 million in a Series A round led by SignalFire, with existing investors Lightspeed and Merlin Ventures also participating. The funding was intended to support product development, expand the company's operations and grow its research and development team. Clutch operates in Israel and the United States.
The reported acquisition would deepen Palo Alto's presence in identity security, an area that has become increasingly important as companies move toward more automated and AI-driven operations. Earlier this year, Palo Alto completed its $25 billion acquisition of CyberArk, the Israeli-founded identity security company. While CyberArk has historically focused on managing and securing human users' access to corporate systems, Clutch targets the credentials and permissions used by AI agents.
A transaction at the reported $500 million price would represent a substantial exit for Clutch and its investors, particularly compared with the approximately $28.5 million the company has raised. However, the startup's current valuation was not known, according to The Information, and the final terms of any transaction remain unclear.
The negotiations are ongoing and may not result in a deal. Palo Alto Networks told The Information that it does not comment on “rumors or speculation,” while Clutch did not immediately respond to a request for comment.
