Cybersecurity M&A Venture

Thoma Bravo Doubles Down On Cybersecurity With $6.9B Buy Of SailPoint As Identity Management Remains Hot

Illustration of guard dogs protecting computer.

Thoma Bravo’s $6.9 billion agreement to buy Austin, Texas-based SailPoint reflects not just a booming interest in the identity management sector but also the private equity giant’s ravenous appetite for cybersecurity.

It was only about a year ago when Okta made huge waves in ID management by announcing its intent to buy Bellevue, Washington-based Auth0 in a $6.5 billion stock deal—one of the largest cybersecurity M&A deals in years.

That deal only highlighted the increasing popularity of managing identification and authentication—especially as more companies moved their systems to the cloud and employees needed to access networks from phones, tablets and their own personal computer.

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That trend was only accelerated by the COVID-19 pandemic, which forced many to not just work at home, but also to move their personal and consumer lives to the internet. Increasing incidents of hacking—be it domestically or related to issues around Russia’s invasion of Ukraine—have only put a brighter spotlight on managing identity.

Investors also have taken note, as funding into VC-backed identity management companies jumped last year, according to Crunchbase numbers. In 2020, about $1.4 billion in funding came into the sector. That number jumped to $3.7 billion last year.

Numbers so far this year are down—only about $400 million has been invested to date—however there have been some large rounds that have minted unicorns, including:

The SailPoint deal also shows Thoma Bravo’s fixation on growing its cybersecurity portfolio. Just last year, the firm grabbed headlines when it bought email and messaging security provider Proofpoint for $12.3 billion. That was added to previous deals for cyber companies like Barracuda Networks and Sophos.

Paying a large price tag for SailPoint may indicate the firm is not done in the realm of security.

Illustration: Dom Guzman

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