Palo Alto Networks discusses $500 million Clutch deal

Valuation and the AI security market

At the reported price, the purchase would value Clutch at about 50 times its annual revenue, a common way to value software companies. Palo Alto Networks and Clutch Security did not respond to requests for comment. The Information was the first to report the talks.

The high valuation reflects market interest in protecting software systems from attackers using AI to make their attacks easier. Last week, TechCrunch reported that Upwind, a startup using AI to protect cloud infrastructure, rejected an offer from DataDog that valued the company at about 40 times its annual revenue.

Palo Alto Networks’ acquisition spree

According to PitchBook, if the Clutch deal goes through, it will be Palo Alto Networks’ seventh acquisition this year. The company has long preferred buying new technology over building it in-house, and has stepped up dealmaking this year amid a rise in cyberattacks involving AI.

In September, Palo Alto Networks acquired Console, a two-year-old startup whose AI agents automate routine IT support tasks. As TechCrunch previously reported, the deal valued Console at $500 million, payable in stock and cash. The company’s other acquisitions this year include:

These amounts are reported in regulatory filings.

Deals involving Clutch’s competitors

Acquisitions are also taking place among Clutch’s competitors. Cyera, valued at $12 billion earlier this year, acquired Oasis Security for $1 billion. Like Clutch, Oasis specializes in managing AI agents’ access to systems.

Cisco, meanwhile, acquired Menlo Ventures-backed Astrix for about $400 million. Calcalist reported the deal.

Dataist's take: The talks suggest that managing AI agents’ access security is becoming a distinct area of focus for large cybersecurity companies. But the acquisition has not been completed, and Clutch and its competitors have been valued in different deals and by different sources, so their valuations should be compared with caution.