Option3 platform Enigma has acquired fellow US cyber-security company Dellfer, which serves the automotive and broader IoT markets.

The transaction comes months after Enigma’s acquisition of Onclave Networks in August 2024. It also initiates a process of product integration, aiding both companies’ enterprise sales efforts that are already in progress, and lays the groundwork for parent company Option3’s future acquisition plans for the platform.

Structured as an all-stock transaction, Dellfer shareholders, including Denso of Japan, will join Enigma’s expanding investor base. Over the past few years, Denso, part of the Toyota group, has collaborated with Dellfer to pioneer cyber security in the automotive sector. With this acquisition, Denso will become one of Enigma’s largest shareholders and gain the ability to tap into the platform’s growing suite of cyber-security products.

“Dellfer will continue its leadership in the automotive sector, building on years of successful development work that allow it to deliver security to the mass market, a critical enabler in an industry where software-enabled connected cars are becoming the norm,” said Manish Thakur, managing partner of Option3. “As part of Enigma, though, Dellfer is also now positioned to enter other sectors, from healthcare to government.”

James Blaisdell, CEO of Dellfer, added: “Dellfer’s expertise in firmware security for large IoT deployments complements Onclave’s strengths in operational technology and critical infrastructure. Together, we address rapidly multiplying security threats originating from outside of traditional information technology and are largely missed by traditional cyber security.”

This second acquisition within six months underscores both the platform’s rapid growth and its position as a player in cyber security, thanks to its focus on the zero-trust model. Zero trust has become a standard in cyber security, mandated for adoption across US government agencies.

Last year, Onclave Networks became the first zero-trust secure communications platform to receive an authority to operate from a US government agency.

Option3’s rapid but targeted expansion of the Enigma platform reflects its larger vision of an integrated ecosystem of technologies that address AI-driven cyber attacks.

“We will bring on to the platform only those that go beyond traditional trust-but-verify cyber security and instead treat all networks and traffic as a potential threat,” said Thakur. “In adopting this exclusively zero-trust approach, Option3 and Enigma aim to both support the US government in own transition to zero trust, and to accelerate its broader adoption across the American economy.”

The acquisition of Dellfer is expected to close by the end of Q1 2025, subject to customary closing conditions.

Enigma (option3.com/enigma) is a cyber-security platform focused on protecting against threats arising from beyond traditional information technology, especially in operational technology and IoT environments.

California-based Dellfer (dellfer.com) is an IoT cyber-security software company that helps device manufacturers embed protection against unknown threats and prevent intrusions with visibility, speed and accuracy.

Option3 (www.option3.com) is a cyber-security private equity firm headquartered in New York and Reston, Virginia. The firm merges insights from the classified realm of US national security with decades of experience in private investing, capital markets, technology development and M&A. Since 2016, Option3 has invested in a range of companies across the cyber ecosystem, with a focus on threat intelligence, operational technology and zero trust.