Cloudflare acquires Area 1 Security for $162 million

Cloudflare has announced that it is acquiring US-based email security provider Area 1 for $162 million (£120.8 million) in cash and stocks combined.

The deal is expected to close in the second quarter of 2022, and comes five months after the web infrastructure and website security company announced its foray into the email security market.

Founded in 2013, Area 1 employs 97 staff members and has been credited with blocking over 40 million malicious phishing campaigns in 2021.

Commenting on the news, Area 1 Security CEO and president Patrick Sweeney said that phishing can be attributed as a cause of “more than 90% of cyber security damages”.

"By combining our leading phishing protection and threat intelligence capabilities with Cloudflare’s global network, data capabilities, and Zero Trust platform we truly believe that together we can help companies of any size better secure their entire network infrastructure and better protect against the most destructive cyber risks,” he added.

Cloudflare co-founder and CEO Matthew Prince described email as “the largest cyber attack vector on the Internet”, before adding that the acquisition of Area 1 will allow Cloudflare to become a “clear leader in Zero Trust”.

“To us, the future of Zero Trust includes an integrated, one-click approach to securing all of an organisation’s applications, including its most ubiquitous cloud application, email. Together, we expect we’ll be delivering the fastest, most effective, and most reliable email security on the market,” he said.

The $162 million acquisition, out of which 40-50% is estimated to be paid in class A stocks, is expected to be one of the most expensive deals in Cloudflare company history. The company has made eight acquisitions to-date – financial details of which hadn’t been made publicly available.

The purchase of Area 1’s business comes only two weeks after Cloudflare announced the acquisition of Vectrix for an undisclosed amount, in an effort to bolster its Zero Trust software-as-a-service security offering.

In September 2021, Cloudflare announced two new services, which marked its entrance into the email security industry: custom domain tool Cloudflare Email Routing and the Email Security DNS Wizard, which protects businesses from phishing and spoofing attacks.