Cybersecurity company ZeroFox is set to go public in $1.4B SPAC merger

Baltimore-born cybersecurity company ZeroFox is going public.

The company on Monday announced plans to go public through a merger with special purpose acquisition company L&F Acquisition Corp. in a deal that will value the company at $1.4 billion.

As part of this deal, ZeroFox said it is acquiring Portland-based  IDX, a company which specializes in digital privacy protection and data breach response services. This will result in a company capable of “addressing the full lifecycle of external cyber threats and risks for its customers,” ZeroFox said in a news release.

The combined company will be renamed ZeroFox Holdings, Inc. It expects to be listed on the New York Stock Exchange under the ticker symbol ZFOX.

Founded in 2013, ZeroFox’s SaaS platform is designed to provide intelligence so companies can take action against external cyber threats on platforms such as Zoom, Slack, Google, Facebook and social media platforms. Alongside threat intelligence, the company said it provides AI-driven analysis, intelligence analysts, services for breach response and adversary disruption, and an app library.

“Since ZeroFox was founded in 2013, we have helped companies address emerging security challenges caused by the transformational shift to a ‘digital everything’ world. This rapid digital transformation has made companies vulnerable to attackers, resulting in the highest breach rate the industry has ever seen,” said James C. Foster, CEO of ZeroFox, in a statement. “We believe that external cybersecurity must be a top three priority and part of the critical security tech stack for Chief Information Security Officers because perimeter firewalls and internal endpoint agents alone are not enough to protect company assets and customers.”

The deal includes a $170 million investment led by Monarch Alternative Capital LP, with participation from Victory Park Capital and Corbin Capital, as well as existing shareholders New Enterprise Associates, Highland Capital, Alsop Louie Partners, Blue Venture Fund, Peloton Equity, Forgepoint Capital and Foster.

The combined company is set to have over 650 employees, and serve nearly 2,000 customers. The company plans to continue investing in AI capabilities, scaling go-to-market efforts and expanding its team.

The deal is poised to complete the path of ZeroFox to become a publicly traded company, which Foster has long discussed as part of the company’s plans. Since starting from a base at tech incubator Betamore, the company moved its headquarters to the Pabst Castle in Federal Hill, and added a series of international offices in the UK, Chile and India. Along the way, it posted some of the city’s top funding rounds including a $74 million round in 2020 and a $40 million Series C in 2017.

ZeroFox will become the latest Maryland company to go public via a merger with a SPAC, which is a company formed for the purpose of combining with another firm, and often taking it public. It has become a popular route to the public markets over the last year.

“With its leading global position, seasoned management team and proven technology, ZeroFox is poised to capture a significant share in the growing, $51 billion external cybersecurity and digital protection market,” said Adam Gerchen, CEO of L&F Acquisition Corp. “This is a transformational deal and I am excited to join the ZeroFox Board of Directors to help accelerate ZeroFox’s growth and integration with IDX in its new chapter as a public company.”

The acquisition of IDX marks its third in recent years. It acquired Vigilante to add threat intelligence analysis expertise in July, and brought on Reston, Virginia-based Cyveillance in October 2020.

The merger deal that will take the company public is expected to close in the first half of 2022.