Akamai Technologies, the major cloud delivery and cybersecurity provider, is closing in on an acquisition that would bolster its portfolio with cutting-edge API protection capabilities. According to sources close to the negotiations, Akamai is nearing a $500 million cash deal to purchase Noname Security, a pioneering API security startup.

The potential acquisition highlights the growing importance of securing the increasing array of application programming interfaces that have become core connectors in today's distributed cloud environments. As enterprises rapidly deploy APIs to enable communication between different software systems, services and data sources, ensuring their security has become an acute challenge.

Noname's innovative platform aims to solve that challenge through sophisticated API analysis and protection capabilities. The startup's technology automatically discovers APIs, assesses their risk exposure, detects attacks and remediates vulnerabilities proactively.

For Akamai, buying Noname would augment its broad suite of edge computing, web performance and security solutions with a specialized API security layer. The deal would position Akamai as a full-spectrum guardian against the rising threat of API vulnerabilities being exploited by cyber attackers.

Co-founded in 2020 by Israeli entrepreneurs Oz Golan and Shay Levi, Noname had raised $135 million from investors like Lightspeed and Georgian at a $1 billion valuation as recently as late 2021. While the reported $500 million price tag represents a haircut from that lofty private valuation, it would still provide a lucrative exit for early investors like Insight Partners and Cyberstarts.

For later-stage backers who bought in at peak pricing, the acquisition by Akamai may enable them to recoup their investments if not the windfall profits projected in headier times. Sources indicate the deal values Noname at around 15 times annualized recurring revenue – a multiple that appeals to the buyer in today's more tempered market for cybersecurity assets.

If completed as anticipated, approximately 200 Noname employees would join Akamai's ranks. The deal talks remain ongoing, with no assurance of a final agreement.

Both Akamai and Noname declined to comment on what Noname termed "rumors or speculation."

Akamai's pursuit of Noname underscores how API security has rapidly escalated as a strategic priority for enterprises and their cybersecurity vendors. As companies increasingly embrace distributed architectures and microservices, privileged APIs have emerged as critical vulnerability points that must be comprehensively secured.

By acquiring an API security disruptor like Noname, Akamai would double down on its mission to protect customers operating in the cloud amid relentlessly evolving cyber threat landscapes. The potential union signals escalating convergence and consolidation in the API security market as incumbent platforms race to get ahead of the API vulnerability curve.