Network Detection and Response
$ 900 Million Acquisition
ExtraHop (the “Company”), the leading provider of cloud-native network discovery and response, today announced that it has entered into a definitive agreement to be acquired by Bain Capital Private Equity (“Bain Capital”) and Crosspoint Capital Partners (“Crosspoint Capital”) in a strategic transaction valued at $ 900 million. Bain Capital is a leading investor in technology companies and a division of one of the world’s leading multi-asset alternative investment firms. Crosspoint Capital is a private equity firm focused on cybersecurity, data protection and infrastructure software.
ExtraHop CEO Arif Kareem and co-founders Jesse Rothstein, Chief Technology Officer, and Raja Mukerji, Chief Customer Officer, will continue in their respective roles. Rothstein and Mukerji will continue to be significant investors in the company.
According to a study by IDC, ExtraHop is one of the top three providers in network Detection and Response (NDR), the second fastest growing segment of the cybersecurity market. The company’s growth has far surpassed that of the segment, and it has expanded the capabilities of its flagship platform to consolidate adjacent markets such as intrusion detection, network forensics, and IoT security.
“Companies today face a number of incredibly sophisticated cyber attacks, the motives of which range from theft of sensitive personal and business data to unlawful profit. Attackers have been at an advantage for a long time, and we are on a mission to change that,” Kareem said. “By combining our exceptional team, market demand and technology with the in-depth expertise and resources of Bain Capital and Crosspoint Capital, ExtraHop has the opportunity to grow faster and accelerate our innovations to help our clients protect their operations from even the most advanced threats.”
“As the events of recent weeks make clear, cybersecurity today is a mission-critical requirement for the strategy and operations of every business on the planet, with huge implications for financial and reputation-related well-being. We believe that network discovery and response is the next big segment of cybersecurity and that ExtraHop has the best enterprise technology in the field,” says David Humphrey, managing director at Bain Capital Private Equity.
“The company’s approach is uniquely positioned to help organizations defend against the most advanced cyber threats and address the security challenges of multi-cloud environments, enterprise IoT, and hybrid workforces. We are very excited to work with Crosspoint Capital to support the talented team at ExtraHop to accelerate the growth of the company and continue to drive progress in cyber defense, ” added Max de Groen, Managing Director at Bain Capital Private Equity, add. ExtraHop is the first targeted investment from Bain Capital Fund XIII, the company’s latest flagship, a $ 11.8 billion private equity fund.
“After many years of building and delivering network visibility in the cyber industry, I was very impressed with ExtraHop in’s ability to protect the network as workloads shift to the cloud and networks go beyond what companies control,” said Greg Clark, Managing Partner at Crosspoint Capital. “When attacked, deep insight into east-West traffic is essential for modern defense, and ExtraHop has excelled in this emerging category with powerful AI and behavior-based analytics.”
Ian Loring, Managing Partner at Crosspoint Capital, added: “ExtraHop provides a unique level of network visibility, delivering sophisticated real-time detection, investigation and response capabilities to organizations around the world. We look forward to working with the ExtraHop team and Bain Capital to support the company in the next chapter of its growth.”
ExtraHop is among the first investments of Crosspoint Capital Fund I, a $ 1.3 billion private equity fund focused on cybersecurity, data protection and infrastructure software.
The transaction is expected to close in summer 2021 and is subject to customary closing conditions, including receipt of regulatory approvals.
Qatalyst Partners acts as ExtraHop’s exclusive financial advisor and Wilson Sonsini acts as legal counsel. Morgan Stanley acts as financial advisor to Bain Capital and Crosspoint Capital, and Ropes & amp; Gray LLP acts as legal advisor.
ExtraHop is dedicated to empowering security teams to address active threats and stop intrusions. Our Reveal(x) 360 platform, built on cloud AI, decrypts and analyzes all cloud and network traffic in real time to eliminate blind spots and detect threats that other tools escape. Advanced machine learning models are applied to continuously collected petabytes of telemetry data, helping ExtraHop customers identify suspicious behavior and secure over 15 million IT assets, 2 million POS systems, and 50 million patient data. A market leader in network discovery and response, ExtraHop has recently won 30 industry awards, including Forbes AI 50, Cybercrime Ransomware 25 and SC Media Security Innovator.
About Bain Capital Private Equity
Since its inception in 1984, Bain Capital Private Equity has worked closely with management teams to provide the strategic resources that build great companies and help them succeed. Bain Capital Private Equity’s global team of approximately 550 professionals creates value for its portfolio companies through its global platform and deep expertise in key vertical industries such as healthcare, consumer/retail, financial and business services, industrial, and technology, media and telecommunications. Bain Capital has 22 offices on four continents. The firm has made primary or additional investments in more than 1,000 companies since its inception, including supporting the growth of cybersecurity and technology companies such as Symantec, Blue Coat, Nutanix, BioCatch, Awake, Armis, and BMC. In addition to private equity, Bain Capital invests in various asset classes, including loans, real estate, public equity and venture capital. In total, Bain Capital manages more than $ 130 billion and uses the company’s common platform to leverage opportunities in strategic focus areas.