When it comes to cybersecurity M&A, CrowdStrike CEO and cofounder George Kurtz follows a kind of Goldilocks rule, seeking startups in the “sweet spot.”
“There are some companies that are obviously richly-valued,” Kurtz told Fortune. “I think some of these companies don’t realize that they are starting to move into zombieland: You look at their last round valuation, and it might be great for them, but it’s expensive and it’s necessarily actionable for a lot of companies, even ours.”
To be sure, there have been a couple of notable big-ticket acquisitions in cyber lately: Palo Alto Networks’ $25 billion acquisition of CyberArk and Google’s proposed $32 billion acquisition of Wiz.
But Kurtz argues that the real opportunities, and the lowest integration risk, is in scooping up companies at the right stage. “We like to catch them in the sweet spot of where we can add value, and that value accrues to CrowdStrike’s shareholders.”
CrowdStrike, which went public in 2019, is a longtime acquirer, and this week announced its acquisition of data observability startup Onum for about $290 million. Kurtz exclusively spoke to Fortune about the Onum deal.
Onum marks CrowdStrike’s first deal since last year’s much-publicized IT outage, which Kurtz says didn’t derail its M&A efforts, but offered a pause. In the aftermath, CrowdStrike set a high bar and refrained from closing any deals, while continuing to talk to companies, entrepreneurs, and VCs, keeping the M&A pipeline active, said Kurtz. The Onum deal ultimately came together in three months. The Madrid-based startup, which counts Dawn Capital and Insight Partners among its VC backers, was especially compelling to CrowdStrike for its real-time pipeline detection—the ability to analyze and detect threats or anomalies in data as it is being ingested into a company’s systems.
“If you think about the data we have, we started becoming the Reddit of security data for all these AI models,” said Kurtz. “The more data we get in, the larger the moat we actually have, and the greater the opportunity we have to solve bigger and broader problems from an AI perspective. That’s really driving our vision for AI-native SOC [security operations center]. It’s a natural extension.”
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