Splunk Acquires Security Provider Phantom for $350 Million

Big data company Splunk Inc. has agreed to buy venture-backed Phantom Cyber Corp. in a deal worth approximately $350 million in cash and stock. If the acquisition clears regulatory review, it will mark San Francisco, Calif.-based Splunk’s largest acquisition to date as it seeks to bolster its cybersecurity offerings.

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Phantom, founded in 2014, helps automate work for IT security staff. Many of its customers also use Splunk’s operational intelligence software which monitors, reports and analyzes real-time machine data.

Palo Alto, Calif.-based Phantom has raised about $23 million in three rounds of funding from backers including Kleiner Perkins Caufield & Byers, TechOperators Venture Capital, Blackstone Group, Foundation Capital, In-Q-Tel, the venture capital arm of the U.S. Central Intelligence Agency, and Rein Capital. In its latest Series B funding round in January 2017, the company was valued at just under $100 million, according to PitchBook Data Inc., and as reported by the Wall Street Journal.

The deal follows a partnership inked between the two tech companies in 2016, which more tightly integrated their offerings for enterprise clients.

Haiyan Song, the head of Splunk’s head of security markets group, is upbeat on the deal’s potential to build out the company’s automation offerings, indicating that it is “the natural next step for us to join forces.”

“Automation is becoming more and more important because of the shortage in professional capabilities,” Song said in an interview with Fortune. “You need to adapt defense at machine speed.”

In Splunk’s most recent third quarter earnings call in November, the company indicated that it raked in approximately $950 million in revenue for 2017. The firm posted a 42% jump in sales over its last fiscal year, attributing nearly 50% of its revenues to its security offerings.

In June 2015, the Silicon Valley big data specialist bought behavior analytics tool company Caspida in a deal worth $190 million. The acquisition, which was Splunk’s largest acquisition at the time, was also intended to build out the company’s security product line.