The deal, representing the largest acquisition of an application security company to date, surprised many onlookers given the slowdown in deal flow amid the pandemic. The Israeli firm was previously bought by New York-based Insight Partners in 2015 for $84 million.
While the outbreak and global restrictions on movement made the acquisition a logistical headache, Checkmarx’s executives said a good product and positive market momentum could prevail over the coronavirus disruption.
“We started the acquisition process a little bit before the coronavirus outbreak was at its height, but it was a very expedited process,” Checkmarx CEO Emmanuel Benzaquen said. “From the first meeting with H&F to the signing of the agreement was only a couple of weeks. The most important part of a flash process is to create very high momentum, so when bidding day comes, everybody knows that there is no second chance.”
Although admitting he would not start an acquisition process at the peak of a pandemic, Benzaquen said building products wisely should overcome most logistical obstacles.
The outbreak may affect the number of participants in the process and a “bit of the valuation” in current acquisitions, he said, adding that he was confident any loss of value could be recovered in subsequent rounds.
Benzaquen and CTO Maty Siman discussed their recent acquisition ahead of a live-streamed event on The Jerusalem Post website organized by Startup Grind.
“In Israel, we run before we walk,” said Siman, who founded and has led Checkmarx together with Benzaquen since 2006. “The market runs very fast, and if you just wait until things mature, you just won’t be able to catch up with the market. Finishing and hitting the market is better than over-perfecting the product.”
Following years of successfully hitting the market, the company now employs more than 700 workers, and its software security technology is used by more than 40 of the Fortune 100 and half of the Fortune 50 firms.
As more global activities move into the digital world, including remote work and online food orders, the amount of code being written is doubling rapidly. The trend permits the co-founders to look forward with even greater optimism.
“Checkmarx is in the domain of securing those codes, so it is a great tailwind for us,” Siman said.