Cloudflare announced on Wednesday that it is acquiring cybersecurity firm Area 1 Security for approximately $162 million. Area 1 Security has a cloud-native platform built to work alongside email programs to stop phishing attacks.
Cloudflare said 40-50% of the $162 million price tag is payable in shares of Cloudflare's Class A common stock. The acquisition will close in Q2.
Area 1 Security claims to have blocked more than 40 million "malicious phishing campaigns spanning business email compromise, malware, ransomware, and other advanced threats."
"Email is the largest cyber attack vector on the Internet, which makes integrated email security critical to any true Zero Trust network. That's why today we're welcoming Area 1 Security to help make Cloudflare's platform the clear leader in Zero Trust," said Matthew Prince, CEO of Cloudflare.
"To us, the future of Zero Trust includes an integrated, one-click approach to securing all of an organization's applications, including its most ubiquitous cloud application, email. Together, we expect we'll be delivering the fastest, most effective, and most reliable email security on the market."
Area 1 Security CEO Patrick Sweeney added that by combining their phishing protection and threat intelligence capabilities with Cloudflare's global network, data capabilities, and Zero Trust platform, they can help companies of any size better secure their entire network infrastructure.
"Today, email is a business' most-used cloud application. It's unfortunately unprotected. We estimate that more than 90% of cyber security damages are the result of just one thing: phishing," Sweeney said.
Cloudflare recently launched an Advanced Email Security Suite as its first foray into email security in 2021. The company said Area 1 Security's highly scalable technology and years of experience in email protection would enhance Cloudflare's global network
In a blog post, Cloudflare explained that they are constantly being attacked.
"We have been using Area 1 for sometime to protect our employees from these attackers. In early 2020, our security team saw an uptick in employee-reported phishing attempts. Our cloud-based email provider had strong spam filtering, but fell short at blocking malicious threats and other advanced attacks. Additionally, our provider only offered controls to cover their native web application, and did not provide sufficient controls to protect their iOS app and alternate methods of accessing email," Cloudflare said.
"Clearly, we needed to layer an email security solution on top of their built-in protection capabilities.The team looked for four main things in a vendor: the ability to scan email attachments, the ability to analyze suspected malicious links, business email compromise protection, and strongAPIs into cloud-native email providers. After testing many vendors, Area 1 became the clear choice to protect our employees. We implemented Area 1's solution in early 2020, and the results have been fantastic."
They went on to say that Area 1 helped them proactively identify phishing campaigns and contributed to a "significant and prolonged drop in phishing emails."
Area 1 has worked in the email security space for nine years and has a significant trove of threat intelligence data.
"Area 1's technology was so effective at launch, that our CEO reached out to our ChiefSecurity Officer to inquire if our email security was broken. Our CEO hadn't seen any phishing attempts reported by our employees for many weeks, a rare occurrence. It turns out our employees weren't reporting any phishing attempts, because Area 1 was catching all phishing attempts before they reached our employee's inboxes," the company added.