F5 Networks announced on Thursday that it has agreed to acquire privately held Shape Security for approximately $1 billion in cash.
In September 2019, Shape raised a $51 million in Series F growth funding, valuing the company at $1 billion. Santa Clara, Calif.-based Shape has raised a total of $183 million in funding.
According to F5, Shape’s anti-fraud technology will help F5 provide customers with protection from automated attacks, botnets and targeted fraud.
Shape was founded in 2011 by Derek Smith (CEO), Justin Call (VP, R&D), and Sumit Agarwal (COO) and emerged from stealth in 2014.
Shape uses its AI-powered systems for fraud detection to distinguish between human and automated traffic. It already protects some of the world’s largest organizations against cyber fraud, including more than half of all online banking in the U.S.
In May 2019, Shape announced a new product designed to protect small and medium business (SMB) websites from advanced bot-based credential stuffing. The same basic technology that can differentiate between genuine and automated fraud can differentiate between genuine and automated logon attempts.
In March 2019, F5 announced its acquisition of NGINX, a company best known for its open source web server, for approximately $670 million.
“Bringing together F5 and NGINX’s application expertise across multi-cloud environments with Shape’s anti-fraud capabilities for web, mobile and APIs reinforces our ‘code to customer’ promise with a comprehensive, end-to-end application security offer,” François Locoh-Donou, CEO at F5 Networks, wrote in a letter to employees. “This has the potential to save customers billions of dollars lost to fraud, reputational damage and costly disruptions to digital transformations.”
F5 believes the acquisition of Shape will more than double F5’s addressable market in security.
“With Shape, we will deliver end-to-end application protection, which means revenue generating, brand-anchoring applications are protected from the point at which they are created through to the point where consumers interact with them—from code to customer,” Locoh-Donou said in a statment. “Beyond opening a fast-growing $4 billion adjacent market, Shape’s machine learning and AI-powered capabilities will scale and extend F5’s broad portfolio of application services and expand our ability to optimize and protect customers’ applications in an increasingly complex multi-cloud world.”