API startup Noname Security is close to a $500 million deal to sell itself to Akamai

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Noname Security, a cybersecurity startup that protects APIs, is in advanced talks with Akamai Technologies to sell itself for $500 million, according to a person familiar with the deal.

Noname was co-founded in 2020 by Oz Golan and Shay Levi and is headquartered in Palo Alto, but has Israeli roots. Startup raises $220 million from venture investors Last time it was valued at $1 billion In December 2021 when it raised $135 million in Series C led by Georgian and Lightspeed. Although the sale price is a significant discount from that valuation, the deal will currently be in cash, the person said. This deal is not final and may be subject to change or may not be finalized at all.

Other investors who have backed Noname include Insight Partners, Forgepoint, CyberStarts, Next47 and The Syndicate Group.

While the potential deal is priced at half of Noname's last private valuation, those who invested early on will receive meaningful returns from the sale. In the meantime, the deal should allow later-stage investors, especially those in the final rounds, to get the full return on capital they have deployed, if not the profits they are looking for in those tough days of 2021. There was hope during a time when money was less. Flows and valuations were optimistic.

The deal values ​​the company at about 15 times its annual recurring revenue, the person said. About 200 of Noname's employees are expected to transfer to Akamai if the sale closes.

Akamai declined to comment. An unnamed security spokesperson told TechCrunch, “As a policy, we refrain from commenting on rumors or speculation.”

Information informed of In January Noname was trying to raise another financing round at a significantly lower valuation. In February, Israeli news outlet Calcalist reported that Noname was in talks with several potential buyers, including Akamai.

Many VC-backed companies that had raised capital at the peak of the tech boom saw their valuations decline after the US Fed raised interest rates. Many are now simultaneously looking for buyers and a new round of funding, known in the finance world as a dual-track process. Meanwhile, many later-stage VCs are looking for liquidity after a frozen IPO market for more than a year. Therefore, the general mood in the venture industry is that, if strong IPOs do not come back soon, it will be a bargain time for M&A activity.