API startup Noname Security is nearing a $500 million deal to sell itself to Akamai

Noname Security, a cybersecurity startup that protects APIs, is in advanced talks with Akamai Technologies to sell itself for $500 million, according to a person familiar with the deal.

No name was co-founded in 2020 by Oz Golan and Shay Levi and is headquartered in Palo Alto, but has Israeli roots. The startup raised $220 million from venture investors was last valued at $1 billion in December 2021 when it raised $135 million in a Series C led by Georgian and Lightspeed. While the sale price is a significant discount to that valuation, the deal as it stands now would be for cash, the person said. The deal is not yet final and could change or not happen at all.

Other investors who have backed Noname include Insight Partners, ForgePoint, Cyberstarts, Next47 and The Syndicate Group.

Although the potential deal price is half the valuation than Noname’s last private valuation, those who invested early will receive a meaningful return from the sale. Meanwhile, the deal should allow later-stage investors, especially those who invested in the last round, to get a full return on the capital they put in, if not the gains they had hoped for during that heady days of 2021, when money was in trouble. continued and valuations were optimistic.

The deal values ​​the company at about 15x annual recurring revenue, the person said. Noname’s approximately 200 employees are expected to transfer to Akamai if the sale is completed.

Akamai declined comment. A spokesperson for Noname Security told JS: “As a matter of policy, we refrain from commenting on rumors or speculation.”

The information reported in January that Noname was attempting to raise a new round of funding at a significantly lower valuation. In February, Israeli news channel Calcalist reported that Noname was present negotiations with various potential buyersincluding Akamai.

Many venture-backed companies that raised capital at the height of the tech boom saw their valuations plummet after the US Fed raised interest rates. Many are now simultaneously looking for buyers and a new round of financing, known in the financial world as a two-track process. Meanwhile, many later-stage venture capital funds are looking for liquidity after more than a year of a frozen IPO market. So the general sentiment in the venture capital industry is that if robust IPOs don’t happen soon, it’s time for M&A bargains.