Rapid7 To Buy Cloud Security Startup DivvyCloud For $145M

Rapid7 has agreed to purchase cloud security posture management startup DivvyCloud for $145 million to help organizations bring their security and DevOps teams together.

The Boston-based cybersecurity company said Arlington, Va.-based DivvyCloud can help customers protect cloud and container environments from misconfigurations, policy violations, external and internal threats, and identity and access management challenges. The DivvyCloud offering combines deep visibility with automated prevention and real-time remediation of risk, according to Rapid7.

“With the acceleration of cloud adoption introducing new enterprise risk areas, we’re excited to bring security and DevOps teams together with DivvyCloud’s best-of-breed compliance, risk management and governance for multi-cloud and container environments,” Rapid7 Chairman and CEO Corey Thomas said in a statement.

[Related: Rapid7 Buys Network Traffic And Security Monitoring Vendor NetFort]

Rapid7’s stock is down $2.94 (6.26 percent) in after-hours trading Tuesday. The acquisition is expected to close during the second quarter of 2020.

DivvyCloud was founded in 2013, employs 76 people, and has raised $28.9 million of outside funding, according to LinkedIn and Crunchbase. The company closed a $20 million Series B round in April 2019 led by Providence Strategic Growth.

“With the combined expertise of both Rapid7 and DivvyCloud, we are even better positioned to help enterprises accelerate innovation using cloud and containers without the loss of control,” DivvyCloud Co-Founder and CEO Brian Johnson said in a statement.

DivvyCloud supports Amazon Web Services, Microsoft Azure, Google Cloud Platform, Alibaba Cloud and Kubernetes as part of its mission to deliver continuous security and compliance for cloud environments, according to Rapid7. The deal is expected to help Rapid7 customers innovate more securely, move out of data centers and into the cloud, and make infrastructure accessible and management, Rapid7 said.

The transaction should help Rapid7 address the need for firms to secure multi-cloud environments by extending the cloud security capabilities of its Insight platform, the company said. Rapid7 currently has capabilities across SIEM (Security Information and Event Management), incident detection and response, vulnerability management, application security, and security automation and orchestration.

“DivvyCloud’s technology, team and market leadership in the cloud security space will enable Rapid7 to better serve its customers’ needs by helping them innovate more securely, and provide a robust set of compliance and remediation paths for those with modern cloud infrastructure,” Rapid7 Chief Innovation Officer Lee Weiner said in a statement.

This is the third acquisition of a cloud security posture management firm in the past eight months, and comes less than three weeks after Zscaler purchased Cloudneeti to prevent and remediate application misconfigurations in the cloud. And Trend Micro bought Cloud Conformity in October 2019 to address misconfigurations and unprotected user accounts in the public cloud.

Meanwhile, this is the third purchase made by Rapid7 over the past 18 months. The company bought NetFort in April 2019 to improve its ability to detect attacks, investigate incidents and gain visibility into devices that pose a risk to organizations, and acquired web application security vendor tCell in October 2018 to help its customers better assess, monitor and protect against application-based attacks.