Multiple sources are claiming that the cybersecurity firm Palo Alto Networks Inc. is closing on the acquisition of Dig Security Solutions Inc., with the deal said to be valued at between $300 million and $400 million.

Reports in Calcalist and TechCrunch today said the two companies are now in “advanced negotiations,” though nothing has been finalized yet and the talks could still break down.

The publicly traded Palo Alto Networks has been on the rise recently as enterprises double down on security amid an increase in the cybersecurity threats they face. Palo Alto currently has a market capitalization of about $70 billion.

The potential acquisition could be one of a pair. Last week, it was revealed that Palo Alto is also holding advanced talks with Talon Cyber Security Ltd. over a possible $600 million acquisition.

Both Dig Security and Talon are based in Israel, they’re both less than three years old, and the prices being mentioned are said to be some way in excess of their current valuations.

Dig Security was founded in 2021 and launched back in May 2022 when it announced it had secured $34 million in funding. The company has created a data security platform that helps organizations to discover, classify, protect and govern their cloud-hosted data. The startup says that with organizations shifting to complex environments with dozens of database types across clouds, monitoring and detecting data exfiltration and policy violations has become a complex problem with limited, fragmented solutions.

Dig Security says it’s reinventing cloud data loss protection, data detection and security response with a cloud-native and agentless approach. It uses a comprehensive threat model for cloud data attacks that detects, analyzes and instantly responds to cloud data threats to minimize business impact and damage with an average mean-time-to-detection of less than a minute. It’s said that Dig Security has gained strong momentum, with its clients including a number of Fortune 500 firms, leaders in financial services and business software among them.

TechCrunch says Palo Alto approached both Dig Security and Talon proactively, with neither of the startups initially looking to be acquired.

Palo Alto is said to be motivated by the rapidly evolving nature of cybersecurity, which sees hackers continuously searching for new avenues of attack. One of the latest trends is the use of artificial intelligence to break into corporate networks. When smaller security firms emerge to thwart these new cyberattack techniques, they often become acquisition targets for the more established security players.

Recent examples of this include CrowdStrike Holdings Inc.’s $350 million acquisition of Bionic.ai, and IBM Corp.’s $60 million swoop on Polar Security Inc. earlier this year.

Both Dig Security and Talon offer innovative new security solutions. Dig’s pitch that it’s helping to secure fragmented data across multiple clouds resonates with enterprises, many of which are still growing their cloud spending. Meanwhile, Talon’s novel enterprise browser concept – from which they can run all of their applications and services in one, secure place – is also gaining some traction.

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