Palo Alto Networks Inc. is reportedly in talks to acquire Israeli cybersecurity startup Koi Security Inc. for an estimated $400 million.

According to Ctech by Calcalist today, Palo Alto Chief Executive Nikesh Arora visited Israel last month and evaluated local startups for potential deals. He reportedly emphasized that the rapid changes artificial intelligence is bringing to the cybersecurity sector have created a need to consolidate endpoint solutions, including extended detection and response and endpoint detection and response offerings.

Koi was founded in 2024 by alumni of the Israeli Defense Force’s elite Unit 8200, including CEO Amit Assaraf, Chief Technology Officer Idan Dardikman and Chief Product Officer Itay Kruk.

The company’s inception came about following a real-world white-hat experiment that exposed massive blind spots in software supply chains, notably by creating a fake malicious extension that quickly spread in developer environments. The experiment highlighted the limitations of traditional security tools and sparked the development of a new platform designed to govern and secure modern endpoint environments.

Koi provides full visibility into modern software ecosystems running on enterprise endpoints. The company’s platform differs from traditional security products by continuously tracking and inventorying all such software, making visible what would otherwise be invisible to information technology and security teams, instead of being focused on binary executables and operating system vulnerabilities.

The company’s Supply Chain Gateway acts as a central checkpoint for all incoming software into an organization’s environment and unifies software inventory management with real-time risk analysis and automated policy enforcement. The gateway allows enterprises to govern which software is allowed, flagged or blocked to protect against unmanaged or unauthorized installations and to eliminate critical security gaps before they can be exploited by attackers.

Koi also offers an AI-driven risk engine called Wings that uses machine learning, classification, sandboxing and threat intelligence to evaluate the risk of software components in real time, including novel or previously unseen threats.

Although fairly young, Koi has seen strong growth and currently protects more than 500,000 endpoints globally, including those at Fortune 50 companies, financial institutions and technology companies. Notable customers include OpenAI Group PBC, Cambia Health Solutions Inc., Jump Trading LLC and Fireblocks Ltd.

Coming into its possible acquisition, Koi had raised $48 million over two rounds, including a $10 million seed round and $38 million Series A, both of which were disclosed in September.

For Palo Alto Networks, if the acquisition proceeds, it would be a continuation of an acquisition spree that started with Protect AI Inc. for $500 million plus in April, CyberArk Software Ltd. for $25 billion in July and Chronosphere Inc. for $3.35 billion in November.

Image: Koi