In the fast-paced world of cybersecurity startups, Noname Security, a company specializing in safeguarding APIs, appears to be nearing a pivotal moment. Sources close to the matter suggest that Noname is deep in negotiations with Akamai Technologies for a potential acquisition deal valued at $500 million.
Founded in 2020 by Oz Golan and Shay Levi, Noname has its roots in both Palo Alto and Israel, boasting a substantial $220 million in funding from various venture investors. Its most recent valuation in December 2021 soared to $1 billion after a successful Series C round led by Georgian and Lightspeed. However, the proposed acquisition price, though considerably lower than its peak valuation, is anticipated to be an all-cash transaction.
Who’s Backed the Startup?
Investors, ranging from early backers like Insight Partners to later-stage supporters such as ForgePoint and Cyberstarts, stand to gain from the sale, albeit at a discounted rate compared to previous valuations. Despite this, the deal promises a significant return for those who invested during the company’s formative stages, while later-stage investors are poised to recoup their capital, if not the lofty profits envisioned during the exuberant days of 2021.
Reportedly pegged at approximately 15 times its annual recurring revenue, the acquisition would see Noname’s workforce of around 200 employees transitioning to Akamai upon completion. Akamai, however, has declined to comment on the matter, maintaining its stance of non-disclosure regarding speculative reports.
Noname Security Co-Founders
Why M&A?
Speculation surrounding Noname’s future has been rife, with rumors of a potential financing round at a substantially reduced valuation surfacing in January. Subsequent reports in February hinted at negotiations with multiple suitors, with Akamai emerging as a leading contender.
The current landscape in the venture industry reflects a shift in sentiment, as many VC-backed companies grapple with declining valuations amid rising interest rates. The prospect of a stagnant IPO market has prompted a dual-track approach, with companies exploring both acquisition opportunities and fresh funding avenues. Consequently, the prevailing consensus suggests that unless robust IPOs stage a comeback, the venture market may witness a surge in M&A activity as investors seek value in discounted opportunities.
