The cybersecurity market is experiencing a significant consolidation process which puts pressure on smaller stand-alone companies. In line with this trend, Exabeam and LogRhythm announced their merger this week.
LogRhythm was acquired by Thoma Bravo PE fund in May 2018 with an estimated valuation of $1.2B.
Exabeam, a Fabrica Ventures portfolio company, has raised over $480M in total funding and was valued at $2.4B in its last funding round (June 2021).
LogRhythm specializes in transforming disconnected data and signals into reliable and actionable insights, empowering security teams to prevent breaches. With over 20 years of experience in Security Information and Event Management (SIEM) and User and Entity Behavior Analytics (UEBA), Exabeam, on the other hand, specializes in delivering AI-driven security operations, integrating solutions such as SIEM, security analytics, and UEBA to offer a comprehensive approach to combating cyber threats.
LogRhythm serves thousands of customers worldwide. Exabeam positions itself as a challenger to legacy SIEM vendors, aiming to disrupt the market with its cloud-native, AI-driven security analytics and automation platform.
Both companies have consistently been recognized as Leaders in Gartner’s SIEM Magic Quadrant for several years (see figure above)
Splunk, recently acquired by Cisco for $28B, is the largest player in the SIEM market, with $4.2B in revenues. The Exabeam-LogRhythm merger will create the fourth largest SIEM vendor by revenue, generating over $300M annually, behind Splunk, Microsoft (Sentinel), and IBM.
Conclusion
After 6 years of investing in LogRhythm, the exit clock is ticking for ThomaBravo’s fund.
So, we anticipate that within a year, once synergies and cross-selling opportunities are captured, the newly merged company will be ready for an IPO.