Zscaler has announced a definitive agreement to acquire Red Canary, a Denver-based provider of Managed Detection and Response (MDR) services, as it seeks to broaden its capabilities in security operations and threat detection. Terms of the transaction were not disclosed. The deal is expected to close in August 2025, pending regulatory approval.
The acquisition marks a strategic expansion for Zscaler beyond its core Zero Trust network access offerings into the MDR segment. Red Canary, founded in 2013, provides cloud-based detection and response services to a range of customers, including enterprises, school districts, and managed service providers. The company has been recognized in multiple industry reports, including the Forrester Wave for MDR and the Gartner Market Guide for MDR.
Red Canary raised around $130 million in funding prior to the acquisition, including an $81 million Series C round in 2021 led by Summit Partners. At the time, the company reported 270% revenue growth over two years and noted a doubling of both its sales team and threat detection volume. Red Canary’s platform integrates with more than 200 third-party security tools.
The company ended fiscal year 2025 with over $140 million in annual recurring revenue and positive cash flow, according to a March 2025 press release. The company reported growth in its enterprise segment, with increased adoption of identity and cloud security offerings. Red Canary now serves nearly 1,000 customers, including several Fortune 500 companies. The company’s platform supports automated threat detection and response, and its performance has been noted in industry analyst reports.
Zscaler, which secures traffic for nearly half of the Fortune 500, said the combination would allow it to deliver an integrated, AI-driven Security Operations Center (SOC) offering. Red Canary’s capabilities in behavioral analytics, signal processing, and automated response workflows are expected to complement Zscaler’s existing data analytics and security cloud infrastructure.
The deal comes amid growing enterprise demand for operational security tools that go beyond traditional prevention and perimeter controls. Zscaler executives cited the need to help customers more quickly detect, triage, and remediate cyber threats across endpoints, identities, and cloud environments.
Red Canary’s offerings compete against a mix of independent providers and larger, platform-based cybersecurity firms. Its closest competitors include CrowdStrike Falcon Complete and SentinelOne Vigilance Respond, both of which combine proprietary endpoint detection platforms with managed response services. Other notable players include Arctic Wolf, which offers SOC-as-a-service with a concierge delivery model, and Expel, known for its transparent, vendor-agnostic approach that integrates with a wide range of existing security tools.
The MDR landscape has also seen increasing consolidation. Mandiant is now part of Google Cloud, while Palo Alto Networks recently acquired IBM’s QRadar SaaS assets, signaling its intent to expand further into unified security operations. These developments reflect a broader industry trend toward integrating MDR with SIEM, threat intelligence, and automation. Against this backdrop, Red Canary has differentiated itself as a software-centric MDR provider with strong detection engineering and deep integration capabilities. Its acquisition by Zscaler marks a strategic move to embed managed detection within a broader AI-powered Zero Trust platform, further blurring the lines between detection, response, and infrastructure security.
For Zscaler, the deal builds on earlier efforts to expand into adjacent security operations areas, including its Risk360 product and its 2023 acquisition of data integration startup Avalor. The company processes over 500 billion transactions daily through its cloud platform.
Both companies stated that Red Canary will continue to support its existing customer and partner ecosystems following the acquisition.
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