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Insight Partners To Buy IoT Security Startup Armis At $1.1B Valuation

IoT security firm Armis will continue to operate independently and will be managed by its existing executive team, including CEO Yevgeny Dibrov and CTO Nadir Izrael, both co-founders of the company.

Private equity giant Insight Partners has agreed to purchase fast-growing IoT security startup Armis to strengthen its market position in unmanaged device security.

The largest IoT security acquisition in history values Palo Alto, Calif.-based Armis at $1.1 billion and includes a $100 million investment from Google-backed venture capital fund CapitalG. Armis will continue to operate independently and will be managed by its existing executive team, including Co-Founder and CEO Yevgeny Dibrov as well as Co-Founder and CTO Nadir Izrael.

“We considered growth rounds and strategic offers, but by partnering with Insight, we have the best of both worlds - operational support and independence, both of which were important in our decision to take on a scaleup partner this early in our company journey," Dibrov said in a statement.

[Related: VMware Vet's Firm Leads $65M Round In IoT Security Startup Armis]

Dibrov praised Insight for the depth of its domain enterprise as well as its understanding of the enterprise IoT device challenges Armis is looking to solve. Once the acquisition closes in February, Armis said it plans to leverage the support of Insight’s Onsite business strategy and ScaleUp division.

Armis was founded in 2015, employs 246 people, and has raised $112 million in four rounds of outside equity, according to LinkedIn and Crunchbase. The company in April closed a $65 million Series C round led by Sequoia Capital. As part of the acquisition, Insight Founder Jeff Horing, Insight Managing Director Teddie Wardi, and Cyberstarts Founder Gili Raanan will serve on the Armis Board of Directors.

"Armis is one of the most ground-breaking enterprise data-centric security solutions that is actively protecting modern businesses today,” Horing said in a statement. “Having achieved exponential growth to date, we are proud to be the partner Armis can leverage to help execute their vision of protecting unmanaged devices proliferating every vertical around the world.”

The company lets organizations safely embrace unmanaged and IoT devices throughout their business, and is used by global organizations such as Allergan, Mondelez, Oracle and Sysco Foods as well as 25 percent of the Fortune 50. Unmanaged devices can capture or create business-critical information, work on production lines or administer patient care, but too often have no protection, the company said.

“The exponential growth of Armis to date illustrates just how critical securing unmanaged devices is for businesses,” Izrael said in a statement. “With the backing of Insight, we will continue to expand our world class technology to help identify devices, track their behavior and respond to the threats that target them.”

The deal by Insight is the largest-ever acquisition of a privately-held Israeli cybersecurity firm, and is expected to strengthen Armis’ position with its device behavior tracking and incident response platform. Armis services customers across all verticals, including high tech, healthcare, industrial, retail, smart cities, and transportation, according to the company.

"The strength of Israeli security software is unquestionable, and we are thrilled to be the scaleup partner Armis has selected to continue their explosive growth journey,” Wardi said in a statement. “We've spoken with their users who have told us how powerful the Armis platform is at device discovery, classification, and continuous threat assessment.”

Insight has moved aggressively into the cybersecurity space over the past year, highlighted by the company’s $780 million purchase in May of Somerville, Mass.-based threat intelligence vendor Recorded Future.

The private equity giant was also the lead investor in Mountain View, Calif.-based endpoint protection vendor SentinelOne’s $120 million Series D round as well as San Francisco-based email security startup’s Valimail’s $45 million Series C round, both of which closed in June. Five months later, Insight teamed up with Benchmark Capital for a $35 million investment in container software developer Docker.

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