For the second day in row, a cybersecurity startup with Israeli roots has been bought by a big fish in the security pond.
Zscaler announced Thursday it has acquired Israel-based AI-driven security insights and threat prevention startup Avalor reportedly for $310 million in a cash-and-stock deal.
That deal follows cloud cybersecurity firm Wiz reportedly buying cloud threat prevention startup Gem Security — which has offices in both New York and Tel Aviv — for $350 million in a cash deal.
The deals could help spark more activity in a slow-to-stagnant M&A market in cybersecurity. Last year saw only 66 deals consummated that involved VC-backed cybersecurity startups, per Crunchbase data. That was a 26% drop from 2022, which saw 89 such deals.
The number of deals was also a more than a 50% decline from 2021, which saw a whopping 139 such transactions.
So far this year, there have been only 18 such deals, but the recent spate offers hope. Also, many large names in the sector seem acquisitive, as companies like SentinelOne and Crowdstrike have made buys this year.
The deals also should be good news for the flagging Israeli cyber market. Investors like M&A activity and as such dealmaking can often spark more venture funding.
M&A was not the only news Thursday from the cybersecurity startup market.
San Francisco-based Ballistic Ventures announced it has closed a $360 million second fund. 
Ballistic launched two years ago with a focus on cybersecurity and announced its inaugural $300 million fund.
Speaking of Israeli cyber startups being bought, one of Ballistic’s portfolio companies, Talon Cyber Security, was acquired by Palo Alto Networks in the largest venture-backed cybersecurity startup acquisition of 2023, per Crunchbase data — $625 million
Illustration: Dom Guzman
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