Data443 Buys Cyren Assets Out of Bankruptcy for Up to $3.5MAcquisitive Startup Buys Cyren's Threat Intel, URL Categorization, Email Security
An acquisitive data security startup has purchased Cyren's threat intelligence, URL categorization and email security technology out of bankruptcy for up to $3.5 million.
North Carolina-based Data443 said its acquisition of Washington, D.C.-area Cyren's anti-spam, virus outbreak detection, IP reputation, URL filtering and Threat InDepth data feeds will boost the company's existing product portfolio and fuel the development of next-generation solutions. Data443 said Cyren CISO Michael Tamir and Senior Director of Customer Success Yael Tasher have led much of the effort (see: Cyren Ceases Operations After Financing, Sale Efforts Fail).
“This acquisition represents a significant milestone in our strategic growth plan, and we expect it to strengthen our competitive position by broadening our product offerings," Data443 founder and CEO Jason Remillard said in a statement. "We have already identified several opportunities to enhance our technology stack, and we intend to engage with former technical staff to ensure smooth integration."
The company said it is already executing on service maintenance and operations for Cyren clients, and Data443 is now reviewing new submissions to email@example.com. All of Cyren's data centers have been operating for the past two months, and Data443 said more staff will be available in all geographies in areas from finance and operations to development and threat analysts once the integration is complete.
Data443 did not respond to Information Security Media Group's request for additional comment. The company employs 17 people and raised $1.05 million of post-IPO debt since December 2022, IT-Harvest and Crunchbase found. Data443's stock is traded over the counter, though Remillard said in January that uplisting to Nasdaq is central to continued funding, acquisition strategy and organic growth efforts.
Selling to More Than Technology Manufacturers
The company agreed to part with $500,000 in cash, $2 million worth of company stock and an earn-out payment up to $1 million based on how much customers purchase in the year following close. The deal was inked May 11, announced this week and is expected to close in the third quarter of this year. The company's stock is up $0.02 - or 71.4% - to $0.048 since the transaction was revealed Monday.
The deal comes three months after Cyren laid off 121 staffers - or virtually all its employees, started a voluntary bankruptcy proceeding in Israel, and directed Nasdaq to delist the company. At the time, Cyren said it had failed to sell assets or raise more capital.
In March, Cyren sold its anti-malware technology to Iceland-based Opin Kerfi, which formed a subsidiary called Varist to support the business. That came seven months after Cyren had unloaded its legacy secure email gateway business to German company Content Services Group for $10.6 million.
"Cyren is a leader in emerging and high-volume risk mitigation for some of the world's largest name brand organizations."
– Jason Remillard, founder and CEO, Data443
As part of the transaction, Data443 said it will onboard customers that generated more than $15 million of revenue in 2022 with Cyren. Across all of Cyren, sales dipped during the first nine months of 2022 to $17.3 million, down 4.8% from $18.2 million the year prior. And the company's net loss grew to $25 million, or $2.97 per share - 60.7% worse than the net loss of $15.6 million, recorded the year prior.
Data443 wants to expand Cyren's customer base from security vendors and technology manufacturers to the broader enterprise market. Outside of security, Data443 said Cyren today serves gaming console manufacturers as well as large shopping and e-commerce providers. Cyren fits into Data443's sensitive data marketplace, which includes 1,300 policies in 41 languages and hundreds of platform integrations.
"Cyren is a leader in emerging and high-volume risk mitigation for some of the world's largest name brand organizations we all use today," Remillard said in the statement. "This business has a tremendous track record, providing fast-breaking threat detection services and threat intelligence to major firewall vendors, email providers and leading cybersecurity vendors."
10 Acquisitions in Less Than 6 Years
Data443's revenue plummeted in 2022 due to economic uncertainty and some products shifting from one-time license sales with annual maintenance contract renewals to time-based subscriptions, which resulted in fewer customers paying for subscriptions or renewals. Sales sank to $2.6 million, down 27.2% from $3.6 million the year prior, while net loss surged from $6.5 million in 2021 to $9.7 million in 2022.
The firm has made 10 acquisitions since being founded in 2017, including the buys of workstation security management vendor Centurion Technologies in 2022, email archiving and management firm ArcMail in 2021, security and authentication provider Resilient Network Systems and cloud data analytics provider FileFacets in 2020, and secure digital content distribution platform ARALOC in 2018.
"There are soooooo much product goodness in here," Remillard wrote on LinkedIn on Monday. "We continue to lead the space on not just 'finding and recording' data - but actioning it in myriad fashions. The expansion of our staff, data center and partner footprint is a significant item for us. The two organizations mesh extremely well there."