Rapid7 Buys Ransomware Prevention Firm Minerva Labs for $38M
Fraud Management & Cybercrime , Managed Detection & Response (MDR) , Ransomware
Deal Will Help Rapid7 Neutralize and Prevent Malicious Activity Prior to Execution Michael Novinson (MichaelNovinson) • March 15, 2023
Rapid7 has purchased a ransomware prevention vendor founded by a former Israel Defense Forces captain to strengthen its managed detection and response muscle.
The Boston-based cloud risk and threat detection vendor said its acquisition of Tel Aviv-area-based Minerva Labs will enable Rapid7 to deliver advanced ransomware prevention across cloud resources, traditional infrastructure and existing endpoint protection infrastructure. Rapid7 said the transaction will extend its managed threat detection capabilities and help customers consolidate their security infrastructure (see: Rapid7 CEO Corey Thomas on Targeting Phishing Infrastructure).
“With Minerva, we are further extending our MDR capabilities with more advanced anti-evasion and malware prevention and orchestration from the endpoint to the cloud, as well as providing seamless support of existing, leading endpoint protection infrastructure,” Jeremiah Dewey, senior vice president of managed services delivery at Rapid7, said in a statement.
Putting ‘Power Back in the Hands of Organizations’
Rapid7 said it will pay $38 million in cash and stock to acquire Minerva Labs. The deal isn’t expected to have a material financial impact on Rapid7’s annualized recurring revenue growth, revenue, non-GAAP operating income and non-GAAP net income per share for 2023. The company’s stock is down $1.84 – 4.51% – to $39 per share in after-hours trading Wednesday, which is the lowest it’s traded since Jan. 30.
“There are a lot of lower-quality providers in the overall market, and we believe that quality will win out.”
– Corey Thomas, chairman and CEO, Rapid7
Minerva Labs was founded in 2014 by former Israel Defense Forces Capt. Eddy Bobritsky and former CyberArk software architect Erez Breiman, who became the company’s CEO and CTO, respectively. The company employs 30 people and completed a $7.5 million Series A funding round in June 2017 led by Amplify Ventures, according to LinkedIn.
“We’ve worked tirelessly to create technology that combats ransomware and puts the power back in the hands of organizations,” Bobritsky said in a statement. “We are excited to join Rapid7 to continue this journey and integrate our technology into Rapid7’s industry-leading managed detection and response capabilities.”
Rapid7 said Minerva’s technology neutralizes and prevents malicious activity before execution and facilitates integrations with third-party endpoint protection offerings. Security programs benefit from both leveraging seamless access to telemetry across their attack surface, as well as consolidating technology to drive more effective threat response, according to Rapid7.
‘We Believe That Quality Will Win Out’
The company has increased its investment in MDR and managed SecOps given the challenges customers face finding qualified security practitioners, CEO Corey Thomas told Information Security Media Group in an interview published in January. Customers want their vendors to not only deliver technology but also manage it on their behalf in a productive and efficient manner, Thomas said.
Rapid7 has seen great customer demand for MDR, both directly and through the company’s channel partner ecosystem, Thomas said. The company has a large pipeline of MDR customers and prospects, and Thomas said the company has relied on channel partners that can deliver a high level of service to fulfill this need in the market.
“There are a lot of lower-quality providers in the overall market, and we believe that quality will win out,” he said. “People are trying to do it at the lowest possible cost and nickel-and-dime customers on the service. We think that’s going to be a losing proposition over time. We’re really focused on winning the quality of service and experience with best-in-class technology and a robust partner ecosystem.”
This is Rapid7’s fifth acquisition since 2020. It comes 20 months after the company bought IntSights for $335 million to give clients a unified view into threats, attack surface monitoring, relevant insights and proactive threat mitigation. Three months earlier, Rapid7 bought open-source technology Velociraptor to gain more expertise around endpoint monitoring, digital forensics and incident response.
In January 2021, Rapid7 purchased early-stage Kubernetes security vendor Alcide for $50 million to help facilitate the rapid deployment of applications. Nine months before that, Rapid7 bought DivvyCloud for $145 million to help customers protect cloud and container environments from misconfigurations and policy violations. All told, Rapid7 has made 12 acquisitions since October 2009, according to Crunchbase.