Cisco Acquiring Israeli-founded Information Security Firm CloudLock for $293 Million

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High-tech workers in Israel.
High-tech workers in Israel. Credit: Tomer Appelbaum

Cisco Systems, the California-based global networking technology firm, is acquiring CloudLock, a startup founded by Israelis, for $293 million in cash.

CloudLock has developed information technology that helps companies monitor the use of sensitive information and how it is shared within the organization and with people on the outside. Founded in 2007, it is headquartered in Waltham, Massachusetts, but also has several dozen staff at a development center in Israel.

In addition to the nearly $300 million that stakeholders in the company will be receiving, the company’s 150 or so employees will get a package of bonuses that will boost the purchase price from Cisco’s standpoint. CloudLock’s operations will be integrated into Cisco’s existing corporate structure.

Cisco is among the most active multinational high-tech firms in Israel and its chairman, John Chambers, is visiting Israel this week. It has a development center and investment activity in the country, and is involved in a wide range of ventures in Israel.

Since 1998, it has invested more than $2 billion in acquisitions in Israel (not including NDS, which was acquired in 2012, when it was no longer a startup and had changed hands several times before Cisco bought it.) At the beginning of this year, Cisco purchased the Caesarea company Leaba Semiconductor for $320 million. Cisco has also made investments in about 25 Israeli startups that it has not acquired.

CloudLock was founded by its CEO Gil Zimmerman, its business development vice president, Tsahy Shapsa, and Ron Zalkind, its chief technology officer. The company has raised about $38 million since its founding. Its first fund investor was the Cedar Fund. Cedar partner Amnon Shoham recruited Zimmerman, who had been working at the time as a product manager at EMC, to be the fund’s entrepreneur in residence in Boston even before CloudLock was formally founded.

Cedar, which also has offices in Waltham, has invested more than $12 million in CloudLock over the years. Other investors have included the U.S. firms Ascent Venture Partners and Bessemer Venture Partners, and the cloud technology firm Salesforce.

CloudLock’s technology provides a warning regarding the sharing of sensitive files. For example, if an employee places a document in the data cloud with sensitive information – a credit card number, for instance – the system will issue a warning and ask for confirmation that the data was deliberately placed there.

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