Mobile security firm Zimperium to be acquired for $525M, eyes IPO – VentureBeat

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Zimperium, a provider of security for mobile devices and apps, today announced an agreement for Steven Mnuchin’s investment firm Liberty Strategic Capital to acquire a controlling stake in the company for $525 million. The company is now aiming to accelerate its growth and has discussed pursuing an initial public offering (IPO) in the future, CEO Shridhar Mittal told VentureBeat.
Mnuchin — formerly the U.S. secretary of the treasury and now the founder and head of Liberty Strategic Capital — will become chair of the board of directors at Zimperium in connection with the deal. The acquisition is expected to close at some point during the second quarter.
According to Proofpoint, 74% of organizations faced phishing attacks over SMS text message, aka “smishing” attacks, in 2021. That’s compared to 61% in 2020.
Zimperium, meanwhile, has reported that zero-day vulnerabilities actively exploited against mobile devices surged 466% in 2021.
As threats such as mobile phishing and zero-day attacks targeting mobile devices have grown, “if there’s access to corporate data on these devices, they need to be protected just like PCs and Macs,” Mittal said.
In the realm of mobile threat defense (MTD), used for securing mobile devices such as smartphones and tablets, Zimperium stands out by offering on-device threat detection, according to Mittal. The company’s machine learning (ML) technology detects attacks on the device itself without needing to send data out to the cloud. This has benefits including better user data privacy and reduced latency, Mittal said.
Most of Zimperium’s competitors in MTD, on the other hand, depend on the cloud, he said.
“They have started trying to do things on-device. But that’s not an easy thing to do,” Mittal said. “We’ve spent years of looking at data and creating those machine learning models, and using all kinds of different techniques to make this happen. This would be a very difficult problem for any of our competitors to solve very easily.”
Other key vendors in MTD include Check Point, Lookout, Symantec, Palo Alto Networks, Better Mobile Security, Jamf (which acquired Wandera) and Pradeo, among others, according to Gartner.
Meanwhile, in the realm of app security, Zimperium provides app development teams with a scanning engine that can automatically detect issues such as vulnerabilities and policy violations, and enable teams to fix those issues early in the process, he said.
Other capabilities include code protection (through obfuscation of code) and runtime defense with anti-malware functionality, Mittal said.
Zimperium now has 500 enterprise customers, and more than 7,000 customers in all.
The Dallas-based company reports that it generated 53% growth in annual recurring revenue (ARR) in 2021, and is aiming to grow its ARR at an even faster rate for 2022, Mittal said. The company didn’t disclose its total revenue or ARR figures for last year.
In MTD alone, “between us and our competition, we’ve barely penetrated the U.S. market,” Mittal said. “So there’s huge potential.”
The acquisition deal with private equity firm Liberty Strategic Capital came about as Zimperium assessed its options for funding to drive the company’s next phase of growth, he said.
Zimperium currently has 250 employees. In addition to hiring, the company plans to look at making acquisitions in its core areas of MTD and app security, Mittal said.
The company may also look at going public, given the massive opportunity for growth ahead and the company’s differentiated solutions, he said.
While no timeframes have been discussed for an IPO, “we’ve talked about the possibility,” he said. Down the road, “we would definitely consider that,” Mittal said.
Liberty Strategic Capital will not own 100% of the equity in Zimperium under the agreement. One investor, SoftBank Corp., is hanging on to its stake in Zimperium, as are members of the company’s management team and employees.
Zimperium didn’t disclose what percentage of its equity is set to be acquired by Liberty Strategic Capital under this agreement, or what the company’s total valuation would be in connection with the deal.
Past investors in Zimperium have included Samsung, Warburg Pincus, Sierra Ventures and Telstra Ventures.
Since its founding in 2021, Liberty Strategic Capital has made investments in several cybersecurity firms, including Cybereason, Contrast Security and BlueVoyant.
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