VMware acquires network security firm Lastline, said to lay off 40% of staff

Zack Whittaker and Frederic Lardinois

VMware is acquiring network security firm Lastline, TechCrunch has learned.

Since its launch in 2012, Lastline raised about $52.2 million, according to Crunchbase. Investors include Thomvest Ventures, which led the company's $28.5 million Series C round in 2017; Redpoint and e.ventures, which led the company's 2013 funding round; and Barracuda Networks, NTT Finance and Dell Technologies Capital.

A source tells us that VMware will let go some 40% of Lastline's employees — about 50 staffers — as part of the acquisition. We asked a Lastline spokesperson for comment prior to publication but did not hear back. A spokesperson for VMware also did not respond to a request for comment.

After we published, Lastline confirmed the acquisition in a blog post.

"By joining forces with VMware, we will be able to offer additional capabilities to our customers and bring to market comprehensive security solutions for the data center, branch office and remote and mobile users," said Lastline's chief executive John DiLullo.

Terms of the deal were not disclosed. The deal, subject to regulatory approvals, is expected to close by the end of July.

Lastline provides threat detection services mostly focused on the network level, but they range from malware analysis to intrusion detection and network traffic analysis. The company prides itself on being a cloud-native platform and, as such, it promises to secure cloud deployments and on-premises networks, as well as multi-cloud and hybrid environments.

Recently, support for cloud-native hybrid and multi-cloud deployments has very much been a focus for VMware, which makes Lastline a pretty obvious fit for its overall strategy. This also marks VMware's third security acquisition this year, after it picked up network analytics firm Nyansa in January and cloud-native security platform Octarine in May. VMware also acquired security firm Carbon Black in August 2019. The trend here is pretty obvious, and VMware is obviously trying to position itself as the provider of choice for enterprises that are looking for cloud-native security tools.

The company was founded by Christopher Kruegel, Engin Kirda and Giovanni Vigna, a team of computer science professors from the University of California, Santa Barbara and Northeastern University.

News of the acquisition comes a week after VMware announced solid Q1 earnings of $386 million, or $0.92 a share. Revenues came in at $2.73 billion, up about 12% on the same period a year ago. VMware CEO Pat Gelsinger attributed the quarter to the shift to work-from-home sparked by the coronavirus pandemic.

VMware shares were down slightly at Thursday's market close.

Updated to include Lastline's blog post on the acquisition.

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