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Zscaler Buys Piece Of Cybersecurity Startup TrustPath For AI Expertise

TrustPath has developed artificial intelligence-based algorithms through machine learning to identify new threats, resulting in enhanced security efficacy and accelerated incident response.

Zscaler has purchased the development team and artificial intelligence and machine-learning technology of TrustPath, a cybersecurity startup still in stealth mode.

The San Jose, Calif.-based cloud security startup said Santa Clara, Calif.-based TrustPath has developed AI-based algorithms through machine learning to identify new threats, resulting in enhanced security efficacy and accelerated incident response.

"TrustPath's technology complements the broad and deep security capabilities that Zscaler has already built and further enhances the platform," Jay Chaudhry, Zscaler's CEO, said in a statement.

[Related: Cloud Security And Channel Superstar Zscaler Files For $100 Million IPO]

Terms of the deal, which was announced before the market opened Friday, were not disclosed, and Zscaler did not immediately respond to a request for additional comment. Zscaler's stock was up 5 cents, or 0.12 percent, to $42.60 in pre-market trading Friday.

TrustPath's AI and machine-learning technology can be quickly incorporated to deliver new capabilities and protection for Zscaler's customers, which includes more than 200 of the Forbes Global 2000 companies.

Zscaler's platform includes behavior analytics, machine learning, cloud intrusion prevention system (IPS), and zero-day detection, according to Chaudhry.

The company is able to derive intelligence from the 50 billion transactions processed daily at peak periods by its cloud to identify anomalous traffic, build user behavioral profiles, compute enterprise risk posture, and detect sophisticated targeted attacks as they emerge.

A LinkedIn search of TrustPath turns up 14 employees. The company, which Zscaler said is in stealth mode, doesn't have a Twitter page, website, or pretty much any online presence.

This is Zscaler's first acquisition since raising $192 million in a Nasdaq public offering in March 2018. Zscaler was founded in 2008 and, prior to its IPO, had raised $148 million through two rounds of funding.

In its first quarter as a publicly traded company, Zscaler's revenue skyrocketed to $49.2 million, up 49.1 percent from $33 million the year prior.

Zscaler works closely with the channel and reported that solution providers account for more than 90 percent of the company's revenue, according to a S-1 registration statement filing with the U.S. Securities and Exchange Commission in February 2018.

Specifically, the company said it works closely with global systems integrators and regional telecom service providers. Sales through Zscaler's top five channel partners accounted for 47 percent of overall revenue in the fiscal year ending July 31, 2017.

The share of Zscaler's business coming from the channel increased from 80 percent in the year ended July 31, 2015, to 92 percent in the nine months ending April 30, 2018. The company said it works with VARs such as CDW and SHI, systems integrators such as Deloitte and HCL Technologies, and telecom providers such as Deutsche Telekom and Verizon.

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