Palo Alto Networks is in talks to acquire Clutch Security, a startup that secures AI agents’ access to corporate systems. The offer is reportedly $500 million, supplemented by milestone-based payments. If the deal goes through, it will be Palo Alto’s seventh acquisition this year.
This is according to reports by The Information and TechCrunch, citing sources. Clutch is three years old and focuses on non-human identities, such as service accounts, secrets, API keys, and AI agents. In January 2025, the startup raised another $20 million in a Series A round led by Lightspeed and SignalFire. In that round, Clutch was valued at $85 million.
Clutch is currently approaching $10 million in annual recurring revenue (ARR). At an acquisition price of $500 million, that amounts to about 50 times ARR. However, that is not unusual in the current market. Upwind, a startup that uses AI to secure cloud infrastructure, rejected an offer from Datadog just last week that valued the company at about 40 times its ARR.
Seventh deal this year
Clutch would be the seventh acquisition of 2026. The largest deal took place early in the year: in February, Palo Alto completed the acquisition of CyberArk for about $25 billion. This made identity security a core component of the platform.
But it didn’t stop there. In September, Palo Alto acquired Console, a two-year-old startup that uses AI agents to automate routine tasks for IT help desks. That deal was valued at $500 million in stock and cash. Embrace ($325 million), the observability platform Chronosphere ($2.95 billion), and the cybersecurity startup Koi ($231 million) also came under the security provider’s ownership. In addition, the company announced the acquisition of Portkey, which also focuses on securing AI agents.