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. The Information first reported the talks.
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 the source. The startup is approaching $10 million in annual recurring revenue (ARR). If the deal closes at the reported price, it would value Clutch at about 50 times ARR, a common way to price software companies.
Palo Alto Networks and Clutch Security did not respond to requests for comment.
The report says the deal would be Palo Alto Networks' seventh acquisition this year, according to PitchBook. In September, the company acquired Console, an AI agent startup that automates IT help desk tasks, for $500 million in stock and cash, according to TechCrunch. The report also lists other VC-backed companies Palo Alto Networks has bought this year: Embrace for $325 million, Chronosphere for $2.95 billion, and Koi for $231 million, according to regulatory filings.
The article notes that competitors have also