Why Datadog and Rubrik Are in Talks to Buy Laminar for $200MLaminar Has Landed Multiple M&A Suitors Just 18 Months After Emerging From Stealth
A startup founded by two Israel Defense Forces veterans and backed by the likes of Salesforce and SentinelOne will soon be acquired, Calcalist reported Thursday.
Data protection titans including Datadog and Rubrik are in advanced negotiations to acquire New York-based public cloud data observability platform Laminar in a deal valued at between $200 million and $250 million, according to Calcalist. Laminar and Rubrik declined Information Security Media Group requests for comment, while Datadog didn't immediately respond to a request for comment.
The purchase of a promising early-stage company like Laminar by a large technology vendor would match many of the other M&A deals seen in 2023. The economic downturn has made it tough for nascent startups to raise additional funding at an increased valuation, while the push for profitability has caused public or late-stage private companies to shy away from larger deals but left them open to tuck-in M&A.
Akamai, Cisco and Hewlett Packard Enterprise have in recent weeks capitalized on the market upheaval to acquire well-regarded security technologies at a more modest multiple. Akamai last month bought API detection and response startup Neosec for $86.7 million, HPE bought security service edge startup Axis Security in March, and Cisco bought cloud security startups Lightspin and Valtix in February and March.
What Makes Laminar Special?
Now, it appears that multiple technology vendors have their eyes set on Laminar. The company was co-founded in September 2020 by Magic Leap AI leader Amit Shaked and Medigate Chief Architect Oran Avraham, both of whom spent a half-decade in the IDF. Laminar employs 95 people and has raised $67 million in two rounds of funding with backing from Insight Partners, Salesforce Ventures and S Ventures (see: SentinelOne's $100M Venture Capital Fund Seeks Data Startups).
"Properly identifying and mitigating data risk requires understanding of data sensitivity, data security posture, and data exposure in one common view," SentinelOne VP of Corporate Development Alexa Fedyukova wrote. "We see Laminar’s approach as complementary in helping our customers secure data across public clouds and are excited to support Laminar in building a cloud data security platform."
Nearly 60% of Laminar's employees are based in Israel, with roughly 30% in the United States and the remaining 10% in countries including the United Kingdom and India, according to IT-Harvest. IT-Harvest estimates a valuation of between $109 million and $147 million for Laminar and annual revenue of $7 million - or roughly $70,000 per employee - just 18 months after the company emerged from stealth.
Laminar's signature product is a data security posture management tool that detects and alerts on policy violations, prioritizes issues for resolution and provides actionable remediation recommendations. The company also can discover and classify data across AWS, Azure, GCP and Snowflake, map which entities are accessing what sensitive data, and monitor and detect anomalous access patterns, SentinelOne said.
Would Datadog, Rubrik Make a Good Home for Laminar?
Both of the suitors named in the Calcalist article - Datadog and Rubrik - would be well-positioned to digest a company of Laminar's size. Datadog went public in September 2019 at a $7.8 billion valuation and in 2022 earned $1.68 billion of revenue - up 62.8% from $1.03 billion the year prior - and recorded a net loss of $50.2 million, or $0.16 per diluted share, 141.8% worse than 2021's net loss of $20.7 million.
And Rubrik has raised more than $550 million since its founding in 2014, including a $261 million Series E funding round at a $3.3 billion valuation that helped the company move into security and compliance. Despite the economic headwinds, the company has increased its headcount by 19% over the past year to 3,235 employees, with the most aggressive growth coming in its sales and operations organizations.
"We are going after observing the core data to understand the security threat," Rubrik Co-founder and CEO Bipul Sinha told ISMG in September. "As a result, our customers are not only doing the initial purchase, but they are also expanding with us rapidly."
Neither Datadog nor Rubrik has been shy about doing acquisitions to widen its technological footprint, with Rubrik making deals around unstructured data management and infrastructure automation. Datadog has done a dozen deals around everything from cloud architecture and debugging platforms to software engineering and screen-sharing software.
We'll soon know if Laminar is the next name on that list.