Network traffic management company F5 Networks Inc. is paying about $1 billion to acquire Shape Security Inc., which is best known for the fraud detection platform it sells to airlines, banks, government agencies and retailers.

F5 said the acquisition will help it improve its application protection services.

“Shape’s machine learning and AI-powered capabilities will scale and extend F5’s broad portfolio of application services and expand our ability to optimize and protect customers’ applications in an increasingly complex multi-cloud world,” F5 Chief Executive Officer François Locoh-Donou said in a statement.

Shape was in the spotlight fairly recently when it raised a $51 million Series F round of funding that brought its valuation north of $1 billion. The eight-year-old startup has raised $183 million in total and claims $70 million in annual recurring revenue. Its software mitigates more than a billion fake transactions daily and its customers include eight of the top 12 U.S. banks and five of its top credit card issuers.

F5 said the acquisition is subject to regulatory approval and should close in the first quarter of next year. When it does, it expects its software revenue growth to rise from 35% to 40% to around 60% to 70%.

Shape’s co-founder and CEO Derek Smith and its 375 employees are all set to join F5 once the acquisition is completed.

“We look forward to the opportunity to deeply integrate into F5’s platform for application delivery and security — F5 provides the optimum traffic flow insertion point for Shape’s industry-leading online fraud and abuse prevention solutions,” Smith said in a statement.

In an email to company employees, Locoh-Donou said the acquisition would also help F5 accelerate its transition from a maker of hardware for customer’s on-premises data centers to a provider of software for customers that run their computing workloads on public cloud infrastructure.

“By laying out our vision to become the leader in Multi-Cloud Application Services back in 2017, we have been taking deliberate and disciplined steps to realize our future identity,” Locoh-Donou said in the email. “We know what it will take to win; and make no mistake, we are playing offense.”

Image: F5 Networks