The Boston-area cybersecurity scene is ripe with acquisition targets. IBM bought incident-response firm Resilient Systems earlier this year. Now, Cisco Systems says it is acquiring CloudLock, a Waltham, MA-based cloud security company, for $293 million in cash and stock, plus retention-based incentives for CloudLock employees who join Cisco.
It’s one of the biggest exits of the year in the local tech community. And the story of CloudLock, which raised about $35 million in venture funding, holds lessons for entrepreneurs of all stripes.
The company got started in 2007, under the name Aprigo. It was incubated by venture firm Cedar Fund, which led a $3 million Series A round for the company in 2008. Back then, the startup focused on helping business customers manage their data and documents, such as Google Docs. Its technology included a data-visualization interface whereby an IT administrator could see who had access to which shared documents, for how long, how important the information was, and so forth.
Business was good, but in 2011 the company made a strategic shift to take advantage of the growing number of enterprises using the Internet cloud as their primary computing platform. Aprigo changed its name to CloudLock and got rid of its on-premise, subscription-based software model in favor of selling only a cloud-based version. And it refocused its efforts on data security and protection.
“It’s about building the right business model,” said Gil Zimmermann (pictured), CloudLock’s co-founder and CEO, at the time. “There’s a better market opportunity around cloud data protection.”
Zimmermann, an Israel native and veteran of data-storage giant EMC, turned out to be right. By 2016, CloudLock’s software had gained a following among some 10 million enterprise employees at companies and organizations like HBO, Motorola, Whirlpool, and NASA, according to its website. A key differentiator was building out a “platform” instead of a product, Zimmermann said, so that customers could add CloudLock’s security controls to their own products. (You can read more about Zimmermann’s leadership philosophy, musical tastes, and thoughts on Boston-Israel connections in this recent Q&A with Xconomy’s Jeff Engel.)
The company also picked up investor support from Ascent Venture Partners, Bessemer Venture Partners, and Salesforce. And potential acquirers—particularly those with needs in cloud security—were apparently intrigued by CloudLock’s further growth potential.
With the acquisition, San Jose, CA-based Cisco (NASDAQ: [[ticker:CSCO]]) will boost its Boston-area presence as well as its cloud security products. CloudLock will join Cisco’s networking and security business group and report to senior vice president and general manager David Goeckeler. The deal is expected to close in the next few months.
CloudLock’s story and market focus have some elements in common with other local companies such as Backupify (acquired by Datto in 2014), Carbonite, and Threat Stack in data security and protection.
“We’re proud members of the cybersecurity community here in Boston,” Zimmermann said in an interview last month. “The level of intelligence and entrepreneurship here in our condensed area is unparalleled, even on the West Coast. I would take on West Coast cybersecurity any day of the week.”
Xconomy’s Jeff Engel contributed to this report.
