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Palo Alto Networks in talks to buy AI agent security startup Clutch for $500M
Palo Alto Networks is negotiating to buy AI agent security startup Clutch for $500 million.
Key points
- Clutch was last valued at $85 million after a $20 million Series A round in January 2025, led by Lightspeed and SignalFire.
- Clutch is approaching $10 million in annual recurring revenue, implying a price of about 50 times ARR.
- The deal would be Palo Alto Networks' seventh acquisition this year, according to PitchBook, if it happens.
Why it matters. If completed, the deal would extend a run of acquisitions in AI agent security, where several Clutch competitors have also been bought.
Palo Alto Networks is negotiating to acquire Clutch Security, a startup securing AI agents' access to company systems, for $500 million in cash plus milestone payouts, a person familiar said. Clutch was last valued at $85 million after a $20 million Series A in January 2025 led by Lightspeed and SignalFire, and is approaching $10 million in annual recurring revenue. The price would be about 50 times ARR, and The Information first reported the talks.
Latest updates
Palo Alto Networks in talks to buy AI agent security startup Clutch for $500M
Clutch, backed by Lightspeed and SignalFire, was last valued at $85 million, according to a source. 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. Three-year-old Clutch 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 our source. The startup is currently approaching $10 million in annual recurring revenue (ARR). That means the acquisition, if completed, would value Clutch at about 50 times its ARR, a standard way of pricing software companies. Palo Alto Networks and Clutch Security did not respond to a request for comment. The Information was the first to report the acquisition discussions. The high 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 giant has a history of buying innovation rather than build.