Alibaba Cloud to buy cybersecurity startup Chaitin Tech

Alibaba’s booth at WAIC on Aug. 30, 2019 in Shanghai. (Image credit: TechNode/Shi Jiayi)

Alibaba Cloud, a subsidiary of Chinese e-commerce giant Alibaba, is planning to fully acquire Beijing-based cybersecurity startup Chaitin Tech, it said on Friday.

Why it matters: Cloud computing is considered a core component of Alibaba’s business ecosystem and will likely become a key revenue driver. Boosting the security of cloud products is a top priority for the e-commerce giant.

“Alibaba Cloud will be able to significantly boost the capability of its customized security services to its large government and enterprise clients… Chaitin Tech will be able to leverage Alibaba Cloud’s powerful cloud resources and data capabilities to help enterprises grasp the key security links in the increasingly complex IT environment and effectively enhance the value of our products in building security.” (our translation)

—Chaitin Tech in a statement

Details: After the acquisition, Chaitin Tech’s brand and team will operate independently but will leverage the support of Alibaba Cloud’s technology, capital, and businesses to expand its market, the company said in its statement on social media platform WeChat.

• Alibaba Cloud has confirmed the acquisition deal but did not disclose additional information.
• Chaitin Tech said it has been closely collaborating with the cloud computing giant on technology.
• Chaitin Tech has also worked with other Chinese cloud service providers including Tencent Cloud, Huawei, and Qincloud, according to its website.

Context: Top Chinese cloud providers have been focusing on reinforcing security and data protection, which has been a major concern associated with Chinese vendors.

• Alibaba Cloud launched a number of products at its cloud conference in late September that boost security for its enterprise clients.
• Founded in 2014, Chaitin offers internet security solutions to cloud and financial service providers, and operators of high-traffic websites. The startup completed its Series A in June 2016, raising RMB 27 million (around $3.8 million) from investors in ZhenFund, Qiming Venture Partners, and Junsan Capital.
• The company’s security solutions include one that detects hacker behavior and blocks intrusions, boasting an interception accuracy rate of up to 99.99%.