Palo Alto Networks signed a definitive agreement to acquire Koi, an Israeli startup that secures the software and AI tools employees and developers install on their computers, the company announced on 17 February 2026.
Palo Alto did not disclose financial terms. The Israeli business daily Globes reported that the company will pay an estimated $400 million, a figure CyberScoop also cited. Globes had reported the previous month that a deal was close.
After the deal closes, Koi's technology is expected to be built into Prisma AIRS, Palo Alto's AI security platform, and to add visibility into AI-related risks to Cortex XDR, its endpoint product. Palo Alto said it would give more details on its fiscal second-quarter 2026 earnings call, Pulse 2.0 reported.
What Koi built
Koi focuses on what it calls the software perimeter: browser and code-editor extensions, open-source packages, containers, AI models and other software that users install themselves and that traditional endpoint detection and device management tools often miss. Its platform keeps an inventory of that software, rates the risk of each item, enforces policies automatically and includes a gateway that checks software before it is installed, FinTech Global reported.
Its risk engine, called Wings, uses large language models, AI agents and sandboxing to detect malware and vulnerabilities. According to Globes, it scans marketplaces such as the VSCode Marketplace, the Chrome and Edge extension stores, the Firefox store, npm and Homebrew.
The company grew out of ExtensionTotal, a project the founders started after a fake VSCode extension compromised more than 300 organisations. In September 2025 Koi said its platform protected more than 500,000 endpoints, with customers including Fortune 50 companies and large financial institutions.
“AI agents and tools are the ultimate insiders. They have full access to your systems and data, but operate entirely outside the view of traditional security controls.”
Why Palo Alto is buying
Palo Alto argues that AI agents and tools now form an unmanaged attack surface on endpoints. They can read, write and move data with broad permissions, but sit outside the view of traditional security controls, which were built to stop malicious files. The company said attackers are increasingly chaining exploits in agent frameworks, from authentication bypass to remote code execution through APIs.
In Palo Alto's view, the endpoint attack surface now reaches well beyond traditional executable files to include extensions, plugins, packages, scripts and model files, which is the territory Koi's product was built to cover.
Palo Alto and Koi call the combined approach Agentic Endpoint Security, built on visibility into AI-related software, continuous risk analysis and real-time policy enforcement. Lee Klarich, Palo Alto's chief product and technology officer, said the acquisition would close that gap and give customers control over every agent, plugin and script.
The announcement came less than a week after Palo Alto completed its $25 billion acquisition of CyberArk, the Israeli identity security company, Globes reported. CyberScoop described the deal as part of a wider trend of large security vendors buying AI-focused security startups.
The founders and the funding
Koi was founded in 2024 by chief executive Amit Assaraf, chief technology officer Idan Dardikman and chief product officer Itay Kruk. Assaraf previously founded Landa and is an alumnus of the Israeli military's Unit 8200; Dardikman and Kruk have worked at Sygnia and Zscaler, according to FinTech Global.
In September 2025 Koi announced $48 million in seed and Series A funding, including a $38 million Series A led by Battery Ventures, Team8, Picture Capital and NFX, with Cerca Partners also taking part. Globes also named a venture fund run by cybersecurity executives Dan Amiga, Mike Fey, Mickey Bodai and Rakesh Loonkar among its backers.
Citing PitchBook, Globes reported that Koi raised $48 million over two rounds, and that the founders and these main investors would be among the biggest beneficiaries of the sale.
Assaraf said in the announcement that the founders started Koi to secure the next frontier of risk, and that joining Palo Alto would let them bring the technology to the world's largest organisations.
