Israeli IoT security company Armis Inc. was acquired on Monday by Insight Partners, an American venture capital and private equity firm based in New York City, for $1.1 billion, according to the company’s website.
IoT, the Internet of Things, is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.
In the consumer market, IoT technology is most synonymous with the “smart home,” covering devices and appliances that support one or more common ecosystems, and can be controlled by smartphones and smart speakers.
There are a number of serious concerns about dangers in the growth of IoT, especially in the areas of privacy and security. As Armis put it: “According to Gartner, there will be 25 billion connected devices by 2021. The challenge faced is that these unmanaged and un-agentable devices have no security and represent the fastest growing attack landscape for organizations globally, with attacks up 300% in 2019 alone. Armis reports that by 2021, up to 90% of all devices will be unmanaged and unsecured – dramatically increasing potential vector points for attack and creating a massive security gap within businesses and organizations.”
Founded in 2015, Armis provides information security software for enterprise IoT systems, analyzing and classifying devices and their behavior to identify risks and protect information and systems.
The company’s customers include Sysco Corp., Samsung, and Allergan PLC. With offices in Tel Aviv and Palo Alto, Ca, Armis employs about 240 people.
Under the terms of the agreement, Insight will acquire the company for cash at a valuation of $1.1 billion, with participation from CapitalG for $100 million and rollover from certain existing stockholders. Armis will continue to operate independently and will be fully managed by its two co-founders, Yevgeny Dibrov, CEO, and Nadir Izrael, CTO, and executive team, while leveraging the support of Insight’s industry leading business strategy and ScaleUp division, Onsite. Closing is expected to occur in February and is subject to customary conditions and approvals.
“Insight is one of the most sophisticated software investors in the sector, and it is due to the depth of their domain expertise that they really understand the enterprise IoT device challenge we are looking to solve, and the size of the market opportunity. We considered growth rounds and strategic offers, but by partnering with Insight we have the best of both worlds – operational support and independence, both of which were important in our decision to take on a scaleup partner this early in our company journey,” said Yevgeny Dibrov, co-founder and CEO at Armis. “We are thankful for the support we received from our investors at Sequoia, Tenaya, Bain, and Red Dot; and we, as well as the whole Armis team, are very excited to have Insight working alongside us as we enter this next phase, accelerating our platform and growth.”