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SentineOne Acquires Scalyr for XDR, Security Analytics Push

Endpoint security software company SentinelOne has acquired Scalyr, a cloud-based data analytics and log management platform. The deal "unlocks the full promise of XDR," SentinelOne asserts.

This is M&A deal number 101 that MSSP Alert and sister site ChannelE2E have covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.

SentinelOne is paying $155 million in equity and cash for Scalyr. The deal surfaces amid continued speculation that SentinelOne is marching toward a potential IPO. Moreover, numerous security companies are striving to set de facto standards for their XDR (eXtended Detection and Response) products and services.

Scalyr Company Background

Scalyr's technology will allow SentinelOne to "ingest, correlate, search, and action data from any source, delivering the industry’s most advanced integrated XDR platform for realtime threat mitigation across the enterprise and cloud," the buyer asserts. 

Scalyr’s founders, Steve Newman and Steven Czerwinski, are Google veterans who helped to pioneer Google Drive and Google Docs.

Scalyr raised $20 million in a Series A funding in November 2017. Key investors included Shasta Ventures, Bloomberg Beta, Susa Ventures and Heroic Ventures. At the time of the funding, Scalyr described how its software aggregates a company’s server logs and metrics into a centralized system for analysis and troubleshooting. Using Scalyr, engineers can search 1 terabyte of log data per second, according to a 2017 claim from the startup.

SentinelOne’s data services team will continue offering log management, observability, and event data cloud solutions in conjunction with integrating Scalyr, the buyer says.

SentinelOne Acquires Scalyr: Executive Perspectives

Clearly, SentinelOne sees big opportunities for Scalyr in the cybersecurity market.

Christine Heckart, CEO, Scalyr
Christine Heckart, CEO, Scalyr
Tomer Weingarten, founder and CEO, SentinelOne

In a prepared statement about the deal Tomer Weingarten, co-founder and CEO, SentinelOne, said:

“Through our acquisition of Scalyr, SentinelOne is solving one of the industry’s biggest data challenges for delivering fully integrated XDR capabilities. Scalyr’s big data technology is perfect for the use cases of XDR, ingesting terabytes of data across multiple systems and correlating it at machine speed so security professionals have actionable intelligence to autonomously detect, respond, and mitigate threats. This is a dramatic leap forward for our industry – while other next-gen products are entirely reliant on SIEM integrations or OEMs for point in time data correlation and response, SentinelOne uniquely provides customers with proactive operational insights from a security-first perspective. The combination of Scalyr’s data analytics with our industry leading AI capabilities ushers in a new era of machine-speed prevention, detection, and response to attacks across the enterprise.”

Added Nicholas Warner, COO, SentinelOne:

“This strategic acquisition accelerates SentinelOne’s unrivaled product innovation while maintaining a sustainable growth model. Scalyr’s technology solves one of the biggest operational challenges vendors face – balancing the cost structure of ingesting and storing massive amounts of data. Delivering the industry’s most advanced and integrated XDR platform bolsters our hypergrowth path while building a long-term, sustainable business that delivers value to customers and shareholders.”

Noted Steve Newman, co-founder and chairman, Scalyr.

“We built Scalyr to solve critical data challenges for a cloud-first world. I’m excited for the Scalyr team to become part of SentinelOne and solve one of the world’s most pressing big data problems - cybersecurity.”

Concluded Christine Heckart, CEO of Scalyr:

"The security and data analytics industries are uniquely related, and this acquisition provides SentinelOne the opportunity to set the agenda as the XDR category leader. Scalyr's current customers will benefit from expanded investment, and SentinelOne's customers will enjoy Scalyr’s big data capabilities within the Singularity platform.”

SentinelOne: Marching Toward Potential IPO?

Meanwhile, SentinelOne appears to be marching toward an eventual IPO (initial public offering). The company in November 2020 raised $267 million at a $3 billion valuation, and the endpoint security software provider could launch an initial public offering (IPO) by 2021, SentinelOne CEO CTomer Weingarten seemed to indicate at the time of the funding.

Key SentinelOne investors include Tiger Global, Sequoia, Insight Partners and Third Point Ventures.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.