CrowdStrike acquires XM Cyber's technology five years after its $700 million sale
The cybersecurity giant is buying the Israeli company's patents and source code, but not its customers or business, as part of a broader European cloud partnership.
Five years after Israeli cybersecurity company XM Cyber was acquired for $700 million, its intellectual property is changing hands again. U.S. cybersecurity giant CrowdStrike has signed an agreement to acquire the company's technology, source code and portfolio of more than 45 patents, while leaving the business itself intact.
The companies did not disclose the financial terms of the transaction. However, because the deal covers only intellectual property, and not revenue, customers or operating activities, such transactions are typically worth only a fraction of a full-company acquisition.
CrowdStrike, which is listed on the Nasdaq with a market capitalization of approximately $207 billion, is the world's second-largest cybersecurity company after Palo Alto Networks, whose valuation is approaching $290 billion.
XM Cyber was founded in 2016 by former Mossad director Tamir Pardo, together with Noam Erez, Boaz Gorodisky and businessman Shaul Shani. The company developed attack path management technology that enables organizations to simulate cyberattacks, identify how attackers could move through corporate networks, and prioritize the vulnerabilities most likely to be exploited.
In 2021, Germany's Schwarz Group acquired XM Cyber for $700 million, after the Israeli company had raised approximately $48 million. The deal generated significant returns for its founders and early investors.
Schwarz Group, best known as the owner of the Lidl and Kaufland supermarket chains, had sought to expand into cloud computing, cybersecurity and digital infrastructure through its technology subsidiary, Schwarz Digits. However, the latest transaction suggests the group has opted to deepen its strategic partnership with CrowdStrike rather than continue developing XM Cyber's technology independently.
As part of the expanded partnership, CrowdStrike and Schwarz Digits announced plans to bring CrowdStrike's Falcon cybersecurity platform to STACKIT, Schwarz Digits' sovereign cloud platform, targeting European enterprises seeking cloud services hosted entirely within the European Union. The initiative is aimed at organizations responding to increasingly stringent European cybersecurity regulations, including the Cyber Resilience Act and NIS2.
For CrowdStrike, the acquisition strengthens its growing Falcon Exposure Management business, which focuses on continuously identifying and prioritizing the most exploitable security weaknesses across an organization's attack surface. The company said the acquisition comes as AI enables attackers to discover and chain together vulnerabilities more rapidly, increasing demand for integrated security platforms instead of standalone security tools.
Despite acquiring the intellectual property, CrowdStrike will not acquire XM Cyber's revenue, customers or commercial operations.
Instead, XM Cyber will continue operating as a standalone company under a long-term intellectual property licensing agreement with CrowdStrike. Existing customers will continue to be supported and will eventually have the option to migrate to CrowdStrike's Falcon platform through the company's Falcon Flex program.
The transaction is expected to close during the second half of CrowdStrike's fiscal 2027, subject to customary regulatory approvals.
