US-based cybersecurity company Palo Alto Networks plans to acquire AI infrastructure startup Portkey, as it looks to expand its capabilities in protecting AI agents that are increasingly being adopted by enterprises.
The companies did not disclose the financial terms of the deal. According to sources, the transaction — which includes both cash and stock components — values Portkey at $120-140 million, double the $60-70 million it was valued at in February this year, when it raised $15 million in a round led by Elevation Capital.
The deal is expected to close in the fourth quarter of Palo Alto Networks’ fiscal year, subject to approvals.
Exciting News: We’ve signed a definitive agreement to join Palo Alto Networks! We started Portkey on a single idea: that AI in production would need a control plane. Not a feature, not a category somewhere on the side of the stack. Infrastructure. A place where governance, Show more
Portkey, founded by BITS Pilani alumnus Rohit Agarwal and SRM Chennai alumnus Ayush Garg in 2023, is also backed by Lightspeed. Both Agarwal and Garg previously worked at content marketplace Pepper Content.
Nikesh Arora, chairman and CEO of Palo Alto Networks, said in a LinkedIn post, “AI agents have become privileged insiders, reasoning and executing on behalf of users and companies. With that power comes a new category of risk. You cannot build an agentic enterprise without a centralised control plane to secure it.”
“Portkey is a pioneer of AI gateways technology. Their platform is battle-tested at scale, processing trillions of tokens per month,” Arora added.
Portkey builds what it calls an “AI gateway”, a layer that sits between applications and large language models, helping companies manage, monitor, and secure how AI systems interact with internal and external data.
The platform is already handling large volumes of AI traffic, including agent-to-agent communication, according to the announcement.
Palo Alto Networks did not respond to ET’s queries till the time of publishing.
The deal comes at a time when enterprises are moving beyond AI copilots to more autonomous systems that can execute tasks with limited human intervention. These systems often have access to company data and workflows, creating new security risks.
Palo Alto Networks plans to integrate Portkey into its Prisma AIRS platform, positioning it as a central control layer to manage AI agents. The idea is to give enterprises visibility into how AI systems operate, while enforcing access controls and security policies in real time, it said in a statement.
Commenting on the acquisition, Portkey cofounder and CEO Agarwal said, “By joining Palo Alto Networks, we will establish the AI gateway as the foundational layer of the secure AI enterprise. Together, we will provide the infrastructure that allows every organisation to deploy autonomous agents with the confidence that their data and operations are fully protected.”
In a February interview with ET, Arora had said that acquisitions were a part of the cybersecurity firm’s strategy of building a platform of products to allow it to widen its offerings.
“Over the last seven years, we’ve delivered roughly 120-130 new products, of which about 25-30% were acquisitions with the rest being in-house. We expanded into multiple product categories within security. That breadth allowed us to land more customers,” Arora had said.
“Two to three years ago, we started pushing the idea — don’t buy one product from us, buy a platform. Today, we have over 1,500 customers on our platform offerings. This has allowed us to grow our revenue four times,” he added.
Since 2021, Palo Alto Networks has made eight acquisitions, with Portkey being the ninth. Biggest among these was Cyberark, which it bought for $25 billion earlier this year.
Source: Economic Times