Former US Treasury Secretary Steven Mnuchin and SoftBank Group Corp.’s Vision Fund are in talks to broker a deal aimed at salvaging Cybereason Inc., a once-promising cybersecurity company that has struggled with internal turmoil and a steep decline in value.
According to sources familiar with the matter, a group of four investors—Mnuchin’s Liberty Strategic Capital, SoftBank’s Vision Fund, All Blue Capital, and Andra Capital—plans to invest around $100 million in Cybereason. The funds would help stabilize the company and increase the investors’ control over its operations. While the board of Cybereason has approved the deal, it has not yet been finalized, as the investors continue with due diligence, and the deal could still fall through, the sources added.
Cybereason, based in La Jolla, California, has already attracted more than $800 million in investment, but it has faced significant challenges, including mounting losses and internal conflicts. The company’s CEO, Eric Gan, who was previously a vice president at SoftBank, recently filed a lawsuit against Mnuchin and the Vision Fund, accusing them of obstructing his efforts to raise funds to prevent bankruptcy in order to protect their own stakes. The investors have denied these allegations, arguing that the lawsuit is without merit.
Under the proposed deal, each of the four investors would gain the right to nominate a director to a newly-formed five-member board, with the ability to propose executives as well. If the transaction goes through, the new board would consider various strategic options for Cybereason, such as a potential sale or an initial public offering (IPO).
Gan has expressed strong opposition to the deal, highlighting several concerns with the plan. He had previously proposed an alternative $150 million fundraising effort, which the board rejected. Cybereason, which offers technology powered by artificial intelligence to predict and mitigate cyber attacks, was once valued at billions of dollars but has since seen its worth plummet to approximately $300 million.
In 2021, Cybereason announced a merger with Trustwave Holdings Inc., a Chicago-based cybersecurity firm, but that deal has not yet closed. SoftBank’s Vision Fund is not only involved in the current negotiations but also has exposure to Cybereason through various investments, including its role in leading a $275 million fundraising round for the company in 2021.
While discussions continue, the future of Cybereason remains uncertain, with its investors actively seeking ways to salvage the company’s financial health amid mounting challenges.
