Proofpoint buys Varonis for $6.3 billion, researchers tie Discover-Tech ads to spyware, and Axonica raises

Noa Varonis is being sold. Proofpoint, which is owned by private equity firm Thoma Bravo, has agreed to buy the Israeli-founded data security company for about $6.3 billion in cash.

Eli Globes says it is the second Israeli cybersecurity company this year to agree to leave the stock market, after CyberArk.

Noa Good morning, it's Friday, the sixteenth of October. I'm Noa.

Eli And I'm Eli.

Noa Today, the Varonis deal, researchers say an Israeli ad company helped deliver spyware, and new money for chips, drone defense and AI workspaces.

Noa Let's start with Varonis. Shareholders will get $49.75 a share in cash. CTech says that is a 52 percent premium over the share price on the twenty-second of June, the last full trading day before rumors of a sale began.

Eli Globes notes the premium over the current price is much smaller, about 16 percent. The price is roughly 8.4 times Varonis's revenue and 53 times its free cash flow for the twelve months to June.

Noa Varonis was founded in 2004 and is run by co-founder Yaki Faitelson. It employs about 2,800 people, about 1,000 of them at its development center in Israel.

Eli Its software finds sensitive files, checks who has access to them, and flags suspicious behavior. Globes says the company has spent years moving to a cloud subscription model, and that private ownership should make it easier to adapt to the AI era, even at some cost to profitability.

Noa Faitelson said the mission is to secure AI and the data that powers it, and that joining Proofpoint gets them there faster. Proofpoint's chief executive, Sumit Dhawan, said the data an AI system can access determines both its value and its risk.

Eli Proofpoint protects email, users and identities, so Varonis adds data security. Bizportal points out that Proofpoint has bought Israeli companies before, including Illusive, ObserveIT and Meta Networks. Together they would serve more than 16,000 large organizations.

Noa The board approved it unanimously. The deal is expected to close in the first half of next year, subject to shareholder and regulatory approval. Varonis will report its third quarter results on the third of November, without an earnings call.

Noa Now an investigation. Two research groups, Citizen Lab in Canada and New York ad security firm Confiant, say an Israeli advertising company, Discover-Tech, used online ads to track people and help hack their devices. Reuters reported the findings on Thursday.

Eli According to the researchers, Discover-Tech gave Candiru and other Israeli surveillance firms access to ad platforms run by Google, Comcast, Yandex and others. Candiru is a spyware company the US Commerce Department blacklisted in 2021.

Noa Citizen Lab says an ad only had to load on a page for the tracking to work, with no click needed. It says Candiru spyware delivered this way compromised 45 Windows devices at Al Jazeera in 2024 and 2025.

Eli The scale is the striking part. Confiant says Discover-Tech served at least 10 million ads a day, and that they appeared on networks at the Pentagon, the International Atomic Energy Agency and the International Criminal Court. It also says most of the ads were not tied to Candiru.

Noa Discover-Tech did not respond to Reuters, and Reuters could not reach Candiru's owners. The SOFX Report says Google, IAB Europe and Comcast's Beeswax have cut the company off.

Noa Now the funding rounds. Globes reports that Axonica Labs, a new AI chip company, is raising up to $80 million in a pre-seed round, and has already raised $50 million.

Eli That is a very large pre-seed. The round is led by Amplify Partners, Wing VC and Qualcomm Ventures, with Israeli funds Pitango, Viola and 10D. Chief executive Assaf Touboul was a vice president of technology at Qualcomm.

Noa Axonica is building a chip for running AI models and agents, and says it will be cheaper and more energy efficient than Nvidia's chips. It has about 20 employees and an R&D center in Herzliya Pituah. The company did not comment to Globes.

Eli In defense, CTech reports that Skapion has raised a $36 million seed round led by UP Partners and Khosla Ventures. Its founding architect is retired general Pini Yungman, who ran Rafael's air and missile defense division and worked on Iron Dome.

Noa Skapion is building a system to stop coordinated drone swarms. It claims it can engage more than 100 targets at once and intercept more than 97 percent of them. CTech notes the company has not shared independent test results.

Eli And Zenzap has raised $44 million, Globes reports, in a round led jointly by Bessemer Venture Partners and Lightspeed. Founded in 2022, it builds a chat-based workspace where teams of people and AI agents assign tasks, share documents and make decisions together.

Noa Chief executive Guy Weiss said AI has so far been personal, one person and one chatbot, while companies' strength is teamwork. The company says it already has thousands of customers.

Noa Now the quick round-up.

Eli Agtech company BloomX has raised a $13 million Series A led by the Elah Fund, CTech reports. Its robotic systems pollinate blueberries and avocados, and it plans to enter the US market.

Noa Employee assessment company Pilat Group plans to list on Canada's TSX Venture Exchange through a reverse merger in the first half of next year, Globes reports, raising about six million Canadian dollars.

Eli And Check Point's executive chairman Gil Shwed told Calcalist's podcast that he does not see the economic models that justify AI investment on this scale, or the return on it at this stage.

Eli What to watch: Citizen Lab has asked regulators in the US and Europe to investigate Discover-Tech and Candiru. Whether any of them open a case will show if the ad industry faces rules over who it lets in.

Eli Follow Israel Tech Daily wherever you get your podcasts, and read more at startuptofollow.com.

Noa Shabbat shalom. See you Sunday morning.