US company Rapid7 (Nasdaq: RPD), a security and analytics provider, is investing in Israel. The company, which has a $4.5 billion market cap, is buying Israeli startup Alcide IO, developer of a security and control platform for Kubernetes-based cloud infrastructures, for $50 million.
As part of the acquisition deal, which was signed on Thursday night, Alcide will become Rapid7’s development center in Israel. Most of its employees will continued to work under Rapid7, but Alcide will cease to have independent marketing and sales, and so some employees will be laid off. The deal also includes bonuses designed to keep the existing team at the company, and an undisclosed amount for expanding the Israeli development center.
Alcide is based in Tel Aviv. It was founded in 2016 by Rani Nachmias (who is no longer active at the company and currently manages the startup growth program Intel Ignite Tel Aviv), and Gadi Naor, who serves as Alcide’s CTO. Serial entrepreneur Ami Aharoni joined in 2018 as chairperson. Amir Ofek, formerly president and CEO of Cyberint, has been Alcide’s CEO for the past eighteen months, and led the current deal.
Alcide has raised $12 million from, among other investors, Elron Electronic Industries Ltd. (TASE: ELRN), Intel Capital, and CE Ventures. In a notification to the Tel Aviv Stock Exchange, Elron said that it held 24% of Alcide, and would receive $12 million from the acquisition deal. $1.3 million of the acquisition price will be deposited in a trusteeship for 18 months to secure certain indemnity commitments to the acquiring company. The notification states that Elron, which invested in Alcide at the seed stage, will post a profit of $11.5 million on the deal.
Published by Globes, Israel business news – en.globes.co.il – on January 31, 2021
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