Blackberry buys AI startup Cylance for $1.4B

Ruben Fields
November 18, 2018

In a statement on Friday, BlackBerry said that it will pay $1.4 billion in cash for Cylance, plus an undisclosed amount for employee incentives that haven't yet vested.

It expects Cylance to help expand its QNX unit that makes software for next-generation autonomous cars.

Under the terms of the deal, Cylance would continue to function as an independent business unit, one that recently offered to provide antivirus software, free of charge, to all of the 2018 political campaigns in the U.S. The deal is pending regulatory approvals and other customary closing conditions and it's expected to close before February 2019.

BlackBerry says that the acquisition of AI-based cybersecurity firm, Cylance, will complement its entire technology portfolio.

Having Cylance in BlackBerry's back pocket gives the company a broader customer reach and a more in-depth understanding of how AI fits into security and risk prevention. Acquiring and implementing Cylance's products and technology within BlackBerry Spark will be "indispensable to realizing the Enterprise of Things", BlackBerry CEO John Chen said in the press release. Cylance is a privately held company so it is hard to tell how long it would take to recover the costs of the purchase, or exactly what efficiencies will be realized with the implementation of the software in Blackberry's platforms.

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The acquisition is a crucial part of the narrative that has seen BlackBerry, once the doyen of the smartphone world, pivot in the direction of enterprise security for the internet of things (IoT), or "enterprise of things" as the company puts it.

The company had been considering filing for a stock market floatation, according to a report in Business Insider. Blackberry believes that the acquired capabilities from Cylance will strengthen their position in the enterprise market, specifically providing better security and privacy across their platform.

Cylance was founded in 2012 and had raised approximately $297 million in funding.

Privately owned Cylance uses machine learning to preempt security breach before they occur.

Cylance's Chief Executive Officer Stuart McClure said it would be able to leverage BlackBerry's strength in mobile communications and security to adapt its AI technology.

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