Highlights:

  • Noname Security was established in 2020 and provides a comprehensive security platform that enables businesses to monitor and protect both managed and unmanaged APIs.
  • Noname Security had raised USD 220 million in venture funding prior to its possible acquisition.

Akamai Technologies Inc. to acquire Noname Security, an Israel-based business application programming security startup. The companies are reportedly in advanced discussions to close a deal worth USD 500 million, a value that’s half of the company’s valuation from its most recent venture funding round.

There has been no additional confirmation, but in February, there were rumors that Noname Security was being discussed for a possible acquisition worth hundreds of millions of dollars, with Akamai mentioned as a potential buyer.

According to the reports, the prospective transaction would be for cash, at least as it stands. The deal is not complete and may change or not materialize at all.

Noname Security was established in 2020 and provides a comprehensive security platform that enables businesses to monitor and protect both managed and unmanaged APIs. The company’s platform, which is meant to remove API weak spots, shields businesses against data leaks, authorization problems, abuse, misuse, and corruption.

The company’s platform supports every facet of API security, ranging from remediation and testing to detection and analysis. After compiling a comprehensive list of all the APIs used by a company, the platform uses AI and machine learning techniques to identify potential threats, suspicious activity, and misconfigurations.

In November, Noname Security announced collaboration with Swimlane Inc., Palo Alto Networks Inc., and Tines Inc. These companies are leading security orchestration, response, and automation platforms. As a result, joint customers may automate and expedite their security incident response procedures for APIs.

Noname Security had raised USD 220 million in venture funding prior to its possible acquisition. This included a USD 135 million round on a USD one billion valuation in December 2021. Investors include The Syndicate Group Inc., Cyberstarts Venture Capital Ltd., Next47 GmbH, Lightspeed Venture Partners Inc., Insight Partners LP, and Georgian Partners Inc.

The obvious question is why the company’s valuation has decreased by half in the past 2.5 years if the USD 500 million acquisitions go through.

There is no one correct response to that. Still, one consideration is that the company’s most recent funding round coincided with the height of investor interest in startups. This frenzy has since sharply decreased, albeit with some slight indications of recovery.

Given that it was revealed in January that Noname was attempting to acquire funds through a down round, there’s also a chance that the company is nearing its financial limits. Wealthy businesses only attempt to raise capital through down rounds when necessary.