Rapid7 announced today after the closing bell that it will purchase DivvyCloud, a startup for cloud security and governance, for $ 145 million in cash and shares.
With Divvy, the company is moving deeper into the cloud, which is what Lee Weiner, Chief Innovation Officer, is working on before the pandemic pushes this agenda forward.
Like any company looking to expand its offering, it has struck a balance between building and buying and decided that buying is the better way. “DivvyCloud has a fantastic platform that really gives businesses the freedom to innovate when they move to the cloud to manage their compliance and security, ”Weiner told TechCrunch.
CEO Corey Thomas says it is currently not possible to make a deal without considering the economic conditions due to the pandemic, but he says this was a step they were happy to take.
“You actually have to think about everything that is going on in the world. I think we are in a fortunate position because we have had the advantage of both growing and making our business more efficient over the past few years,” said Thomas.
He said this acquisition fits perfectly with what he has heard from customers about what they need right now. “One area of new projects that is actually advancing is how people are trying to figure out how to digitize their operations in a world where they’re not sure how quickly employees can gather and work together. In this context, it has become even more important for the company to focus on the cloud and support our customers ’journey to the cloud,” he said.
Brian Johnson, CEO and co-founder of DivvyCloud, says that’s exactly what his company offers and why it should go well with Rapid7 Family. “We help customers innovate quickly in the cloud while ensuring they stay secure, well managed, and compliant,” he said. This requires a different game book than on-site customers, especially what requires automation and real-time correction.
With DivvyCloud, Rapid 7 is a 7-year-old company with 70 employees and 54 customers. According to PitchBook data, $ 27.5 million was raised on a post-money valuation of $ 80 million. All employees will become part of the Rapid7 organization when the deal closes, which is expected to happen later this quarter.
The companies say they will continue to support existing Divvy customers as they come together, while working to integrate them more deeply into the Rapid7 platform.