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 deal.
Nameless was co-founded in 2020 by Oz Golan and Shay Levi and is based in Palo Alto but has Israeli roots. The startup raised $220 million from venture investors and was last valued at $1 billion in December 2021 when it raised $135 million in a Series C led by Georgian and Lightspeed. While the sale price is a significant discount to that valuation, the deal as it currently stands would be in cash, the person said. The agreement is not final and could change or not happen at all.
Other investors that have backed Noname include Insight Partners, ForgePoint, Cyberstarts, Next47 and The Syndicate Group.
While the potential transaction price is half the valuation of Noname’s last private valuation, those who invested in the early stage will receive a significant return from the sale. Meanwhile, the deal should allow later-stage investors, particularly those who invested in the latest round, to earn a full return on the capital they invested, if not the profit they expected during those heady days of 2021 when money was exhausted. were flowing and valuations were optimistic.
The deal values the company at about 15 times annual recurring revenue, the person said. Noname’s approximately 200 employees are expected to transition to Akamai if the sale closes.
Akamai declined to comment. A Noname Security spokesperson told TechCrunch: “As a policy, we refrain from commenting on rumors or speculation.”
Information reported in January that Noname was attempting to raise another round of financing at a substantially lower valuation. In February, Israeli media outlet Calcalist reported that Noname was in negotiations with several potential buyersincluding Akamai.
Many venture capital-backed companies that raised capital at the height of the tech boom saw their valuations fall after the US Federal Reserve raised interest rates. Many are now simultaneously seeking buyers and a new round of financing, known in the financial world as a two-track process. Meanwhile, many late-stage venture capitalists are seeking liquidity after more than a year of a frozen IPO market. Therefore, the general sentiment in the venture industry is that if strong IPOs do not return soon, it will be time to look for bargains for M&A activity.