Microsoft nears $170 million deal to buy CyberX

Microsoft is close to reaching a deal to acquire IoT security startup CyberX for upwards of $170 million, according to Israel-based media reports.

The companies are collecting signatures from CyberX’s shareholders, and Microsoft will announce a deal in the next few days, according to Haaretz, which puts the purchase price at $165 million. Another Israeli media outlet, CTech, says Microsoft will pay $170 million for the security startup.

Microsoft declined to comment on the reports.

CyberX Platform

CyberX, which is based in Waltham, Massachusetts, was founded in 2013, and has raised $47 million. It developed agentless software that continuously monitors and provides visibility into unmanaged IoT and industrial control system devices across IT and operational technology (OT) environments. Its customers include two of the top five U.S. energy utilities, a leading global pharmaceutical company, and national energy utilities across Europe and Asia-Pacific, according to its website.

Microsoft has been building out its IoT security arsenal over the past couple years, and earlier this year made available a threat hunting service that works across customers’ clouds, data centers, endpoints, and IoT devices. At the time it also rolled out Azure Security Center for IoT, which connects Azure cloud security, visibility, and analysis tools with the company’s Azure IoT Hub.

The acquisition would bolster both of these IoT security services, and comes as the number of connected devices explodes — Gartner expects 25 billion of these by 2021. They represent the fastest-growing attack landscape for organizations globally, according to F-Secure.

Hot M&A Target

Because of this, IoT security startups have become hot acquisition targets for larger vendors and private equity firms alike as organizations look to converge their IT and OT security.

Last summer Cisco bought a small IoT security startup called Sentryo and used its technology for its new IoT security architecture. And earlier this year Insight Partners bought IoT security startup Armis for $1.1 billion in the largest-ever enterprise IoT security software acquisition.

―SDX Central