ExtraHop acquired by Bain Capital and Crosspoint Capital for US$900M

ExtraHop has entered into a definitive agreement to be acquired by Bain Capital Private Equity and Crosspoint Capital Partners. The strategic transaction is reportedly valued at US$900 million.

Bain Capital is an investor in technology companies and a multi-asset alternative investment firm. Crosspoint Capital is a private equity firm focused on cybersecurity, privacy, and infrastructure software sectors.

ExtraHop CEO Arif Kareem and co-founders Jesse Rothstein, chief technology officer, and Raja Mukerji, chief customer officer, will continue in their respective roles.

Rothstein and Mukerji will also remain significant investors in the company, according to a statement.

According to research from IDC, ExtraHop is among the top three players in network detection and response (NDR), the second fastest growing segment of the cybersecurity market.

The company's growth has extended its flagship platform to consolidate adjacent markets like intrusion detection, network forensics, and IoT security, according to the company.

On the growth of the company and demand for such services, Kareem says, "Organisations today face an array of incredibly sophisticated cyber attacks with diverse motivations that run the gamut from theft of sensitive personal and business data to illicit profit. Attackers have long had the advantage, and we're on a mission to change that.

"By combining our exceptional team, market need, and technology with the deep domain expertise and resources of Bain Capital and Crosspoint Capital, ExtraHop has the opportunity to grow faster and accelerate our innovation to help our customers defend their operations from even the most advanced threats."

The investors also commented on the market landscape and acquisition.

Bain Capital Private Equity managing director says, "As the events of the last few weeks make crystal clear, cybersecurity is now a mission-critical requirement in the strategy and operations of every organisation on the planet, with enormous implications for financial and reputational well-being.

"We believe that network detection and response is the next major cybersecurity segment and that ExtraHop has the best enterprise technology in the space.

Bain Capital Private Equity managing director Max de Groen says, "The company's approach is uniquely positioned to help enterprises defend against the most advanced cyber threats and address the security challenges of multi-cloud environments, enterprise IoT, and hybrid workforces.

"We are thrilled to join the talented team at ExtraHop, in partnership with Crosspoint Capital, to help accelerate the growth of the business and continue advancements in the art of cyber defence.

ExtraHop is the first dedicated investment made from Bain Capital Fund XIII, the firm's latest flagship US$11.8 billion private equity fund.

Crosspoint Capital managing partner Greg Clark says, "After many years of building and delivering network visibility into the cyber industry, I was very impressed with the capabilities of ExtraHop in their ability to protect the evolving network as workloads shift to the cloud and networks expand beyond what corporations control.

"When you're under attack, deep visibility into east-west traffic is vital for modern defence and ExtraHop has set itself apart in this emerging category with powerful AI and behaviour-based analytics."

Crosspoint Capital managing partner Ian Loring says, "ExtraHop brings a unique level of visibility into networks and delivers sophisticated real-time detection, investigation, and response capabilities to organisations around the world.

"We are excited to partner with the ExtraHop team and Bain Capital to support the company in the next chapter of its growth."

ExtraHop is among the first investments in Crosspoint Capital Fund I, a US$1.3 billion private equity fund focused on the cybersecurity, privacy, and infrastructure software sectors.

The transaction is expected to close in the summer of 2021 and is subject to customary closing conditions, including receipt of regulatory approvals.