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API startup Noname Security closes to selling itself to Akamai for $500 million

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 matter.

Co-founded in 2020 by Oz Galan and Shay Levi, Noname is based in Palo Alto but has its roots in Israel. The startup raised $220 million from venture investors, Last valued at $1 billion In December 2021, the company raised $135 million in a Series C funding round led by Georgian and Lightspeed. Although the sale price represents a significant discount to the valuation, the current transaction will be conducted in cash, the person said. This transaction is not final and may change or not occur at all.

Other investors backing Noname include Insight Partners, Forgepoint, Cyberstarts, Next47 and The Syndicate Group.

While the potential transaction price is half of Noname’s last private valuation, those who invested early will receive significant returns from the sale. At the same time, the deal should allow late-stage investors, especially those who invested in the previous round, to reap the profits, if not the profits they had hoped for in those heady days of money flows in 2021 A full return on the capital they invested. And the valuation is optimistic.

The deal values ​​the company at about 15 times annual recurring revenue, the person said. If the sale is completed, Noname’s approximately 200 employees are expected to transfer to Akamai.

Akamai declined to comment. A spokesperson for Noname Security told TechCrunch, “As a matter of policy, we do not comment on rumors or speculation.”

information report In January, Noname attempted to raise another round of funding at a significantly reduced valuation. In February, Israeli news outlet Calcalist reported that Noname was in talks with several potential buyers, including Akamai.

Many venture-backed companies that raised money during the tech boom have seen their valuations plummet after the Fed raised interest rates. Many companies are now simultaneously seeking buyers and new rounds of financing, known in financial circles as a dual-track process. Meanwhile, many late-stage venture capital firms are looking for liquidity after the IPO market froze for more than a year. As a result, the prevailing sentiment in the venture capital industry is that if strong IPOs don’t return soon, M&A activity will be a bargain.

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