Cloud security company HyTrust Inc. said Tuesday it has acquired the data management and security startup DataGravity Inc. for an undisclosed fee.

HyTrust the announcement at the same time as it revealed a new $36 million Series E funding round led by Advance Venture Partners.

Rumors that DataGravity had been acquired begun swirling last week, beginning with a report from TechTarget that suggested the company was shutting up shop entirely. That wasn’t entirely true, as DataGravity Chief Techology Officer Dave Siles later came out to say that the company hadn’t closed at all, and would be revealing a new owner very soon. Now we know who that owner is.

What does seem to be true is that DataGravity was struggling financially for some time, and had been eagerly seeking an exit. A second report in The Register said DataGravity initially appeared to have closed down on June 15, with an internal shutdown warning sent out to staff on June 7. The company also laid off numerous staff in the weeks before the sale, and is said to have spoken to companies including Veeam Software and Zerto Ltd. about a possible acquisition prior to talking to HyTrust.

The good news is that what’s left of DataGravity seems to have found itself a nice new home. HyTrust is a well-funded and growing software business that’s focused on providing security, compliance and control services for VMware Inc. and public/private cloud environments. It began life in 2007, and the latest round announced on Wednesday brings its total funding to $95.5 million.

It’s probably fair to assume that customer interest in what HyTrust has to offer is growing after so many security scares of late. The risk from threats such as ransomware is growing by the day, forcing enterprises to look for ways to shield themselves wherever they can.

“HyTrust is very well positioned to capitalize on a tremendous growth opportunity in the cloud security space,” said David ibnAle, a founding partner of AVP, which led HyTrust’s latest round. “The need for security, automated compliance and policy enforcement for cloud infrastructure and data is critical in almost every industry, and HyTrust is front and center in this field.”

HyTrust said in a statement it will use the new funds to build out its sales and marketing teams, and further its product development. As for DataGravity, it said it plans to use its technology to expand its own data security solutions and “further automate and enhance security policy enforcement for workload data.”

DataGravity main products are tools designed to help companies secure their data and comply with local data privacy regulations. HyTrust is more focused on workloads themselves, and so the two products should complement each other nicely.

“The acquisition will accelerate the expansion of HyTrust’s platform capabilities and capitalize on the high-growth cloud security market,” Eric Chiu, HyTrust’s co-founder and president, said in a statement.

Image: HyTrust