Wiz Buys Startup Gem Security for $350M to Spot Cloud Issues – Source: www.databreachtoday.com

Cloud Security
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Security Operations

Buying CDR Startup Gem Will Help Wiz Address Needs of SecOps, Incident Responders

Michael Novinson (MichaelNovinson) •
April 10, 2024    

Wiz purchased a cloud detection and response startup founded by a longtime Israeli Military Intelligence leader to address security operations and incident response use cases.

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The New York-based cloud security phenom said its acquisition of fellow New York startup Gem Security will bring Wiz’s chops in securing infrastructure and cloud environments together with Gem’s expertise inside the security operations center. Bringing together data and insights from cloud infrastructure and the SOC will allow the joint company to serve a broader set of needs from different customer teams (see: Why Wiz Wants to Buy Cloud Startup Gem Security for $350M).

“For us, joining Wiz is not giving up the dream of building something big,” Gem co-founder and CEO Arie Zilberstein told Information Security Media Group. “Quite the contrary, it’s accelerating that. We wanted to tag along to Wiz’s big dream with our big dreams and work together to achieve that faster.”

Terms of the acquisition – which closed this week – weren’t disclosed, though a source familiar with the situation told ISMG that Wiz paid $350 million for Gem. The company was founded in 2022 and employed 50 people. The Gem transaction comes just four months after Wiz made its first-ever acquisition, scooping up cloud-based development platform Raftt for as much as $50 million, Bloomberg reported at the time.

Gem has been led since inception by Zilberstein, who previously oversaw incident response at Sygnia as well as research and development for Unit 8200 of the Israeli Military Intelligence Directorate. The purchase by Wiz comes just six months after Gem completed a $23 million series A funding round led by GGV Capital.

“We wanted to build the company because we wanted to accomplish something big,” Zilberstein said. “We had a big dream of building a notable business in the space of detection and response when it meets the cloud. I think Wiz came to see us a lot in deals and in organizations.”

Zilberstein said Wiz’s capabilities in cloud and data security posture management will provide Gem with the necessary context to better understand threats, while Gem will help existing Wiz customers detect threats in real time. Gem’s detection know-how will be enhanced by a sensor Wiz released within the past six months based on its deep experience with cloud workloads, according to Zilberstein.

From Infrastructure to Incident Responders

Wiz excels on its own at spotting cloud vulnerabilities, misconfigurations and posture problems, and Zilberstein said Gem can enhance that by detecting in real time when a security issue is being actively exploited. The security operations team is already accustomed to working with the infrastructure team and developers to get more context around potential security issues when they spot abnormal activity.

Gem primarily competes against leading endpoint detection and response and security information and event management companies who’ve deployed agents or starting taking signals from the cloud, he said. The typical customer is either a Fortune 500 or Global 2000 firm willing to shell out for the best technology in each security category or a cloud-native organization looking to Gem for SecOps, he said.

From a metrics perspective, Zilberstein wants to track the adoption of cloud detection and response technology by looking at annual recurring revenue, the number of new customers and the use of Gem’s capabilities by existing Wiz customers. Gem has been selling its cloud detection and response product for just over a year, and Zilberstein said the company has beaten its ambitious projections every quarter.

“I think the reason Wiz was excited is because they saw us a lot,” Zilberstein said. “And the reason our investors were excited – and we were able to get funded one time after another – is because we were able to grow very, very fast.”