Israel’s Hot Cybersecurity Start-up Scene

Israel is currently home to one of the most active cybersecurity start-up markets in the world. The scene is certainly more energetic than anything coming out of Europe or Asia Pacific at the moment, and is rivalling US dynamism. The number of dedicated cybersecurity firms to come out of the region has been staggering: over 100 in 2013. Alongside more entrenched Israeli players such as Check Point and Cyber Ark, some notably successful start-up companies have emerged. Established players in the North American market are snapping up Israeli companies; Trusteer (acquired by IBM), ThetaRay (acquired by GE), Najavo Systems (acquired by Salesforce), NDS (acquired by Cisco), Versafe and Magnifire (both acquired by F5) have seen successful exits in the U.S. market.

Jerusalem Venture Partners Cyber Labs (JVP) has built up some of these cybersecurity start-ups with investment support from the Israeli government. JVP’s incubator is conveniently located in the same center that hosts the headquarters of the IDF Communications Corps and Ben-Gurion University’s cybersecurity lab. Cisco announced in early 2014 that it will invest tens of millions of dollars in the JVP cybersecurity fund. In January 2014, IBM and Ben-Gurion University announced their intention to establish a Center of Excellence for Security and Protection of Infrastructure and Assets, located in Be’er Sheva technology park. Both Lockheed Martin and EMC stated they were ready to invest in the park.

A number of other companies have made similar investment announcements: Deloitte, Microsoft, Amazon, FireEye, Palo Alto Networks, Intel, Trend Micro, and Huawei. All are putting out feelers in the Israeli cybersecurity market in the hopes of grabbing one of the hot start-ups. The allure is notably that of the skill pool: most of the entrepreneurs are highly skilled cybersecurity professionals with past military experience in the IDF and so a deep understanding of modern cyberwarfare and security technologies. The result is an outbreak of seriously talented start-ups offering cutting edge solutions.

Adallom for example, which recently secured $15 million in funding, offers security for SaaS applications. Acting as a sort of security broker, the company enables enterprises to monitor, audit and protect user activities inside and across SaaS applications. Its authentication solution leverages a feed pattern of behavioral analysis to a machine learning algorithm. FortyCloud on the other hand is a cloud network firewall solution delivered as a service. The start-up provides identity-based network access, encryption of data in transit, and logs audit trails and system events. Most interestingly, it is able to isolate and interconnect cloud deployments using overlay networks.

On the service and consulting side there are companies like AppSec Labs which provides advanced application security through code review, penetration testing, and consulting to companies. Their focus is on providing and implementing secure development practices, whether through consulting services or educational training programs. In terms of cyber intelligence, Israel is also home to offshoots such as SenseCy, originally part of Terrogence. The company offers affordable actionable intelligence and tailored services on malware, threat groups, and motivations by a team of skilled professionals able to penetrate darknet forums and gather information on numerous threat actors.

Other companies to look out for include Cyvera (currently in negotiations with Palo Alto Networks for a potential $150-190 million deal) which offers cyberdefense solutions to combat sophisticated targeted attacks and CyberTinel offering malware, threat and APT detection using advanced silent agents to analyze suspicious code through five powerful engines. The list of hot companies is far too long to review here, but these few offer a flavour of what the Israeli cybersecurity market has to offer.