Cisco Systems Inc., headquartered in California, USA, reported that it would acquire a cybersecurity organization, Duo Security for $2.35 billion.
Robert Salvagno, Head of Cisco’s corporate development said, “The deal is an example of a move toward software and our shift to more recurring revenue with new subscription-based solutions.”
The acquisition is an example of an uncommon multi-billion dollar exit for cybersecurity venture investors who have been pouring cash at a record pace in a swarmed market of cybersecurity.
According to a report, there are more than 3,000 digital security organizations with more than 400 being funded by investors every year, because of the fact that, many investors are getting a huge amount of returns on their investments from these cybersecurity companies. Benchmark, a funding firm got 20 times returns on its initial interest in the organization.
Cisco’s second biggest purchase
This acquisition is Cisco’s 2nd biggest deal after last year’s $3.7 billion purchase of AppDynamics, a business performance monitoring software company. AppDynamics’ deal is also the largest purchase in the cyber security industry. Cisco bought five security companies over the past three years.
Situated in Ann Arbor, Michigan, Duo raised $119 million till date from financial investors including, Lead Edge Capital, Index Ventures, Workday, Redpoint Ventures and True Ventures.
Duo Security provides unified access security as its platform enables users to verify their identity with a two-step authentication process which will be used by Cisco to connect their customers to the applications over the cloud platform.
Goldman Sachs and Barclays, as well as the law firm Fenwick & West were the financial advisors of Cisco and Duo was advised by Qatalyst Partners and law firm Gunderson Dettmer.
Cisco has been expanding its limits beyond networking in sectors such as the Internet of Things, security, and cloud-based applications.
