Palo Alto Networks in talks to buy AI agent security startup Clutch for $500M

Palo Alto Networks is successful talks to get Clutch Security, a startup that secures AI agents’ entree to institution systems, for $500 cardinal successful currency positive further milestone-based payouts, according to a idiosyncratic acquainted with the discussions.

Three-year-old Clutch was past valued astatine $85 cardinal erstwhile it raised a $20 cardinal Series A circular successful January 2025, led by Lightspeed and SignalFire, according to our source.  The startup is presently approaching $10 cardinal successful yearly recurring gross (ARR). That means the acquisition, if completed, would worth Clutch astatine astir 50 times its ARR, a modular mode of pricing bundle companies. 

Palo Alto Networks and Clutch Security did not respond to a petition for comment. The Information was the archetypal to study the acquisition discussions.

The precocious valuation is not an anomaly successful a marketplace progressively focused connected securing bundle against atrocious actors utilizing AI to breach systems much easily. Upwind, a startup utilizing AI to unafraid unreality infrastructure, precocious turned down an acquisition connection from DataDog that valued it astatine astir 40 times ARR, TechCrunch reported past week.  

If the woody happens, it would beryllium Palo Alto Networks’ seventh acquisition this year, according to PitchBook.  The cybersecurity elephantine has a past of buying innovation alternatively than gathering it in-house, and it has ramped up dealmaking this twelvemonth successful effect to rising AI-driven cyberattacks.

In September, Palo Alto Networks acquired Console, a two-year-old startup that uses AI agents to automate regular IT assistance table tasks. The transaction valued Console astatine $500 cardinal successful banal and cash, TechCrunch reported. Other VC-backed companies that Palo Alto Networks has scooped up this twelvemonth see NEA-backed Embrace, for $325 million; Chronosphere, an observability level backed by Greylock and Lux Capital, for $2.95 billion; and Koi, a cyber startup backed by Battery and Team8, for $231 million,  according to regulatory filings.

Several of Clutch’s competitors person besides been acquired. Cyera, a cybersecurity startup valued astatine $12 cardinal earlier this year, acquired Oasis Security, which, similar Clutch, focuses connected managing AI agents’ entree to systems, for $1 billion. Meanwhile, Cisco bought Menlo Ventures-backed Astrix for astir $400 million, Calcalist reported.