Zscaler Expands AI-Driven Security Operations with Red Canary Acquisition

Zscaler Inc. announced on May 27, 2025, a definitive agreement to acquire Red Canary, a leading Managed Detection and Response (MDR) company, in a strategic move to enhance its AI-powered security operations capabilities. 

The acquisition combines Zscaler’s Zero Trust Exchange platform with Red Canary’s threat detection expertise to create a unified, agile Security Operations Center (SOC) that integrates AI-driven workflows with human expertise.

The acquisition represents Zscaler’s natural expansion beyond its core Zero Trust platform into the rapidly growing MDR market. 

Expansion into Managed Detection and Response

Red Canary brings over 10 years of expertise in security operations (SecOps), enabling customers to investigate threats up to 10 times faster with 99.6% accuracy through automated remediation workflows. 

The Denver-based company has been recognized as a Leader in the Forrester Wave for Managed Detection and Response for three consecutive years and featured in the Gartner® Market Guide for MDR for seven consecutive years.

“The proposed acquisition of Red Canary is a natural expansion of our capabilities into managed detection and response and threat intelligence to accelerate our vision of AI-powered SOC of the future,” said Jay Chaudhry, CEO, Chairman, and Founder of Zscaler. 

Red Canary’s annual recurring revenue (ARR) exceeded $140 million as of January 2025, demonstrating strong market traction in the enterprise security operations space.

The integration leverages Zscaler’s massive data infrastructure, which processes over 500 billion daily transactions through the world’s largest cloud security platform, protecting nearly 45% of Fortune 500 organizations. 

This data foundation, combined with intelligence from Zscaler’s ThreatLabz Security Research team and the previously acquired Avalor data fabric technology, will fuel advanced AI-driven security analytics.

Red Canary’s expertise spans endpoints, identity, network, and cloud workloads, addressing critical operator pain points that often lead to missed signals, incomplete threat analysis, and increased vulnerability to undetected threats. 

The combined platform will enable security teams to detect, triage, investigate, and respond to threats with greater speed and efficiency through agentic AI capabilities.

“Zscaler’s global scale and reach provide the resources and granular data needed to fuel advanced AI, threat intelligence, and detection engineering, giving us a broader view of adversary behavior while enabling faster innovation,” said Brian Beyer, CEO of Red Canary.

This acquisition follows Zscaler’s $350 million acquisition of Israeli risk management platform Avalor in 2024, demonstrating the company’s commitment to building an integrated security operations platform. 

The deal positions Zscaler to compete more effectively against standalone point solutions by offering a comprehensive Zero Trust platform with integrated threat detection and response capabilities.

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in August 2025. 

While financial terms were not disclosed, the acquisition strengthens Zscaler’s total addressable market in the security operations space and enhances its value proposition to enterprise customers seeking unified security platforms.

The combined entity will deliver transformative capabilities in cyberthreat protection, data security, and security operations, positioning both companies to address the rapidly evolving threat landscape through innovative AI-powered solutions.

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