Key facts
- Palo Alto Networks is in talks to buy Clutch Security for $500 million in cash plus milestone-based payouts, per a person familiar.
- Clutch was last valued at $85 million in a January 2025 Series A round led by Lightspeed and SignalFire.
- Clutch is approaching $10 million in annual recurring revenue, implying a price of about 50 times ARR.
- Neither Palo Alto Networks nor Clutch Security responded to a request for comment.
- If completed, the deal would be Palo Alto Networks' seventh acquisition this year, according to PitchBook.
Palo Alto Networks is in talks to acquire Clutch Security, a startup that secures AI agents' access to company systems, for $500 million in cash plus additional milestone-based payouts, according to a person familiar with the discussions. Neither Palo Alto Networks nor Clutch Security responded to a request for comment. The Information was the first to report the acquisition discussions.
Clutch, which is three years old, was last valued at $85 million when it raised a $20 million Series A round in January 2025 led by Lightspeed and SignalFire, according to the source. The startup is approaching $10 million in annual recurring revenue, a standard measure of subscription software sales. That would value Clutch at about 50 times its ARR if the deal is completed.
The valuation is not an anomaly in a market increasingly focused on securing software against bad actors using AI to breach systems more easily. Upwind, a startup using AI to secure cloud infrastructure, recently turned down an acquisition offer from DataDog that valued it at roughly 40 times ARR, TechCrunch reported last week.
If the deal happens, it would be Palo Alto Networks' seventh acquisition this year, according to PitchBook. The cybersecurity company has a history of buying innovation rather than building it in-house, and it has ramped up dealmaking this year in response to rising AI-driven cyberattacks.
In September, Palo Alto Networks acquired Console, a two-year-old startup that uses AI agents to automate routine IT help desk tasks, for $500 million in stock and cash, TechCrunch reported. Other venture-backed companies Palo Alto Networks has bought this year include NEA-backed Embrace for $325 million, Chronosphere for $2.95 billion and Koi for $231 million, according to regulatory filings.
Several of Clutch's competitors have also been acquired. Cyera, a cybersecurity startup valued at $12 billion earlier this year, acquired Oasis Security, which like Clutch focuses on managing AI agents' access to systems, for $1 billion. Cisco bought Menlo Ventures-backed Astrix for roughly $400 million, Calcalist reported.