Palo Alto Networks Inc. today announced plans to acquire Dig Security Solutions Ltd., a startup that helps companies track and secure their internal data.

The companies didn’t disclose the deal’s financial terms. However, TechCrunch reported that Palo Alto Networks is paying about $400 million for Dig. The acquisition comes a few weeks after word emerged that the former company was holding talks to buy another cybersecurity startup, Talon Cyber Security Ltd., for $600 million.

Nasdaq-listed Palo Alto Networks sells a set of enterprise cybersecurity products to more than 80,000 customers worldwide. Many core components of its product portfolio are based on technology obtained through acquisitions. Since 2017, Palo Alto Networks has bought more than a half-dozen cybersecurity startups in deals cumulatively worth more than $1.9 billion.

For enterprises, one of the main challenges involved in data security is that it’s difficult to keep track of which file is stored where. If administrators don’t know that a system contains important documents, they may not equip that system with the necessary cybersecurity controls. Overlooked records, particularly customer records, also make it more difficult to comply with privacy regulations such as GDPR. 

Israel-based Dig has developed a platform that can automatically map out the data assets in a company’s cloud environment and on-premises file share applications. The platform classifies the records it finds by sensitivity. It can, for example, flag a spreadsheet as high-priority if it contains customers’ credit card details.

After mapping out a company’s data assets, Dig highlights records that are stored insecurely. It can, for example, spot files that are kept in an unencrypted form or have been shared with users outside the organization. The platform catches more subtle issues as well, such as situations where a company doesn’t log user interactions with an important dataset.

Dig says its platform can spot not only vulnerabilities but also hacking  attempts. The software detects malware lurking among a company’s internal files, as well as unauthorized file downloads. According to Dig, its platform can provide administrators with information on whether a hacker is actively trying to steal data or creating vulnerabilities for use in future cyberattacks.

“While Israel is still mourning for the victims of the October 7th terrorist attack and dealing with the challenges of the war with Hamas, the completion of Dig’s acquisition by Palo Alto Networks is another strong testament to the resilience of the Israeli tech ecosystem, which continues to deliver, no matter what,” said Liran Grinberg, co-founder and managing partner at Dig investor Team8. “Team8 is proud of Dig’s founders and employees for pioneering their space and achieving this fantastic milestone in such a short time.”

Palo Alto Networks plans to integrate Dig’s technology into its Prisma Cloud platform. The platform, which is built in significant part on technology the company acquired through its earlier startup acquisitions, helps enterprises secure their cloud applications. It also eases related tasks such as protecting so-called application secrets, a term that covers encryption keys and other sensitive pieces of data. 

“Dig lets security teams see and secure their data across multi-cloud environments,” said Ankur Shah, senior vice president of Prisma Cloud. “This visibility and security is becoming increasingly important in the age of generative AI.”

The acquisition comes a few weeks after reports emerged that Palo Alto Networks is seeking to buy another cybersecurity startup called Talon. The latter company develops a Chromium-based browser, TalonWork, that is designed specifically for use by enterprises. It ships with a range of cybersecurity features not included in consumer browsers.

The acquisition talks are said to be in an advanced stage. Palo Alto Networks is expected to pay $600 million for Talon, a significant premium over the $126 million the company has raised to date. Talon is backed by Palo Alto Networks rival CrowdStrike Holdings Inc., Lightspeed Venture Partners and other institutional investors.

Dig raised $45 million in funding prior to today’s acquisition announcement. Alongside Team8, the startup is backed by Samsung Electronics Co. Ltd., Okta Inc. and more than a dozen other investors. 

Image: Dig Security