JFrog Expands Security Portfolio With Vdoo Acquisition

June 30, 2021

Software build automation company JFrog has announced its intention to acquire Vdoo, makers of security scanning software, for approximately $300 million in a cash and stock deal.

“This move will amplify JFrog’s current success with our security solution, JFrog Xray, and create the expectation that ‘fearless releases’ will be the experience for both Security and Development teams,” said Shlomi Ben Haim, co-founder and CEO of JFrog, in a statement.

“If any DevOps company isn’t also a security company, it is solving only a small piece of the puzzle,” said Netanel (Nati) Davidi, co-founder and CEO of Vdoo.

Subject to adjustments, the acquisition consists of at least $90 million in JFrog ordinary shares based on the average close price during the last 15 trading days.

JFrog has reiterated its financial guidance for full year 2021, with revenues still expected to be between $198 million and $204 million. This is despite JFrog anticipating consolidated operating expenses to increase by $9-10 million for the rest of 2021. JFrog did not share any revenue numbers relating specifically to Vdoo.

A purchase price of approximately 4.3 times funds raised indicates to me that JFrog sees plenty of growth left for Vdoo. JFrog's existing product portfolio, which includes Artifactory, Xray, and Pipelines, is well regarded but has substantial competition. The security landscape is far larger, and provides a much larger market for JFrog to grow into, and Vdoo provides another entry-point to start with customers that might already have a CI/CD toolchain.

by Justin Warren, Forbes contributor

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