About 400 technology companies in the field of cyber security are currently operating in the State of Israel, most of them – companies that are already in the stages of sales to customers around the world.
No fewer than 35 Israeli cyber companies participated in the RSA conference held at the beginning of this month in San Francisco, the world’s leading event in the field.
According to the estimates of the Economic Unit at the Export Institute, the year 2023 was recorded as a record year in the defense and cyber industry in Israel, with total exports in the industry estimated at approximately 25 billion dollars. According to estimates, the security and cyber sectors make up about a third of Israel’s high-tech exports.
How did Israel become a global cyber power?
Let’s start with the obvious – unit 8200 – a unit for collecting signal intelligence (Signet) and deciphering ciphers, which belongs to the IDF’s intelligence division. The unit is considered one of the best technological units in the world and probably the best in the world.
Unit 8200 in the Israel Defense Forces is today the largest unit among the IDF units and is actually a unique global cyber incubator.
Being an 8200 graduate is like being a graduate of Harvard University, which indicates personal ability above the standard.
The 18-year-old Israeli youths, who find them to be especially talented in the field of technology and creative thinking, enlist in unit 8200 for a technological service of several years in which they develop defense or attack products under ideal conditions, and during the service they meet reservists, most of whom are already senior in the high-tech industry themselves.
In this way, both a technological incubator and a closed, high-quality and unique community of cyber people are created.
When 8200 graduates are released from the service and want to develop their own start-ups, they already have someone to turn to, people in their image and likeness who have already made a lot of money and they speak their same language.
But not only 8200 graduates invest in Israeli cyber, but everyone – “The Israeli cyber industry grew on top of the Israeli high-tech industry that was already established, successful and valued in the world. This helped bring Israel a lot of money designated for cyber investments, and as the success stories multiplied, so did the scope of investment by international and Israeli funds in local cyber companies.
The reputation and image of cyber products developed by Israeli companies is the highest in the world.
The high-tech industry in Israel has matured a lot in the last decade. As a result, there are serial entrepreneurs operating in the market who sold successful companies in this decade and are establishing their second and third companies. They are more experienced, make fewer mistakes and know what to do. This creates strong companies right from the start that know how to run fast. This also applies to people who worked in successful companies in the field of information security, gained knowledge on how to build a company and are now establishing companies as entrepreneurs or as first employees in good startups.
Another reason for the constant rise of Israeli cyber is the improvement of the sales ability of Israeli cyber companies. Unlike before, when Israeli companies had to be swallowed up by a large foreign company in order to market the solution through it, we have entered a new era in cloud security cyber, cloud technology sales operate with more digital sales methods, therefore it is easier to sell compared to old solutions that require physical installation of hardware.
How did the Israeli revolution begin at the end of cyber?
The revolution began back in the days of the mythological Checkpoint established by Shlomo Kramer, Marius Nacht and Gil Shvid in 1993. An Israeli company that develops software for information security and is mainly known for developing firewall software, VPN, and advanced security against cyber threats. The company employs about 6,000 people in over 70 countries around the world and is valued at about 17.5 billion dollars. Its main offices are in Tel Aviv.
And in direct relation to Checkpoint, Palo Alto Networks, the cyber company with the highest value in the world founded by Nir Tzuk, who serves to this day as CTO of the company who was the director of development of the first firewall product at Checkpoint. Last November, shortly after the outbreak of the war, Palo Alto announced the purchase of another Israeli cyber company – Talon (Talon Cyber Security) for $600 million, in what is considered another achievement for the industry.
In May, something happened in the local high-tech industry – the cyber company Wiz, according to estimates, broke the record for the largest amount ever raised by an Israeli startup. Wiz, founded in 2020, announced a $1 billion capital raise at a $12 billion valuation.
Two of the largest companies in Israel in the cyber field :
Aqua Security (Aqua Security) which raised 365 million dollars and Orca Security (Orca Security) which raised 640 million dollars. Both have crossed the $1 billion mark, making them unicorns. Despite the certain erosion that has occurred in the status of this concept, it is still an impressive achievement, and as in the case of many other companies, the founders of Orca are also graduates of Checkpoint, which, as mentioned, was in many ways the founder of the entire industry. Orca is a portfolio company of YL Ventures, which invested in the company from its seed round.
Two other companies that pay tribute to the industry :
CyberProof, a subsidiary of the multinational corporation UST, which employs 650 people in Israel, and MazeBolt, which has been operating for 11 years and provides a unique preventive technological solution for managing DDoS vulnerabilities. “During the first stages of the war, almost 20% of the company’s employees were called to the reserves. The good relations we established ahead of time with the company’s customers in Israel and abroad gave us the breathing space to organize internally. And yet, the employees who remained took on all the tasks of their colleagues in order to continue to respond to all of the company’s customers during such an emotionally charged period, which was proof of our social resilience as Israelis, and of our resilience as a company,” said Doron Davidson, CEO of CyberProof Israel.
“Within a world of cyber companies, Mizebolt as an Israeli company is proud to lead the change of perception regarding preventive treatment of DDoS vulnerabilities. Today, protection for DDoS vulnerabilities alone is not sufficient without an ongoing complementary solution of treatment of weaknesses and preventive measures. We are proud of our employees in Israel and around the world for their contribution to the country during this time, By volunteering, by mobilizing and by their hard work in the difficult situation that the State of Israel is in,” said Rona Rom Amram, Vice President of Business Management and Human Resources at Mayzbolt.
Sherry Brunfeld, investment manager at the venture capital fund NFX, concludes with a sober point of view on the situation. “This is the most difficult year for Israeli high-tech in two decades. We are witnessing, perhaps for the first time, an alarming gap that is growing against the competitors in Silicon Valley. However, despite the very challenging period in Israel that came after an international crisis in high-tech, we continue to see stability in the Israeli cyber world, recruitment And high values compared to the market, it seems that this trend is not in a hurry to change.”
Other Israeli companies that managed to establish their position in the world market:
In this list you can find Salt Security, which was founded in 2016 and raised 271 million dollars. The company is considered a pioneer in the field of API security and secures interface points between products. A similar amount ($255 million) was raised by Coro, which offers protection for small and medium-sized companies, which are favored by cyber attackers. The company employs about 350 people in Israel, and its founders are Guy Moshkowitz, Dror Lieber, Carmel Domshlak and Doron Milchteich.
The company offers a technological platform that saves valuable time and allows business owners to centralize their cyber security management in one place easily and at low costs. Another worthy of mention – Silverfort (Silverfort) with a fundraising of 250 million dollars. The company is deployed in 15 countries around the world, and its technology, which is protected by a patent, enforces the protection on top of the customer’s existing infrastructure.
Other companies to pay attention to –
Saint which currently employs about 250 people. The company has raised 120 million dollars to date, and has about a thousand customers around the world who use its platform, a kind of cyber security “autopilot” for identifying, preventing and responding to cyber attacks. Alongside it, there are many other startups in the field that move on the axis between small and medium-sized companies, and provide a variety of security solutions for companies and organizations around the world. Here are some of them.
Among the younger startups, you can find Prompt Security, which was founded last year and raised $5 million. As you can understand from its name, Prompt Security combines artificial intelligence with cyber and develops a security and privacy platform for the use of Generative AI tools. Another promising young startup is Cyclops, which raised $6.4 million. The company has developed an AI model that collects information from all the security tools in the organization, analyzes it and prioritizes risks that need to be dealt with immediately.
The Torq cyber company, established in 2020, currently employs approximately 160 people. The company has developed an innovative cyber event management and automation platform that has become one of the best sellers in the industry. “In the last year, we grew by more than 300% in sales worldwide, and the real and proven need for our product is leading us to a very significant growth in Israel, the United States and Europe,” said Ofer Smadari, the company’s CEO.
Further down the axis is Cervello, which was founded in 2019 and raised $20 million. It is also in a relatively unique niche for the industry, and deals with the protection of transportation infrastructure. The company was founded by Roi On (CEO), Shaked Kaptzan (CTO) and Nadav Avidan (COO), former intelligence and technology units who founded the company as part of the Reichman University’s Zell program for entrepreneurship. “The international success of Israeli cyber companies in general and of Cervelo in particular, was created, among other things, due to the complex reality of the State of Israel and the expertise in the field that was created, as well as thanks to the human capital,” said Nadav Avidan, Chief Operating Officer and co-founder of the company.
Another interesting company is Guardio, which calls itself “the Netflix of the cyber world” and offers protection to subscribers for a monthly fee. The company was established in 2018, employs 80 people and has raised 47 million dollars to date. It offers browser and mobile security tools that protect users from phishing, scams, malicious content, and identity theft attempts. Guardio offers a B2C solution, that is, it works directly with consumers (Business-to-consumer) and not with business companies as in the more common model in the field, B2B (business-to-business).
For example, Cycode, a portfolio company of the YL Ventures fund, and a B2B startup in the field of application security management (ASPM). The company was founded in 2019 by Lior Levy, Ronan Slavin and Dor Atias, and it helps organizations all over the world to develop code safely and more efficiently and quickly. The company has raised 80 million dollars to date, and recently acquired a European cyber company called Bearer.
Prominent companies in the field of cyber protection
Israeli companies operate in the global market and offer protection from a multitude of cyber threats. The prominent companies in the field are:
Check Point: Founded in 1993 by Shlomo Kramer, Marius Nacht and Gil Shvid. Engages in software development for information security and network and computer security, and is mainly known for developing firewall and VPN software.
Radver: Founded in 1996 by Yehuda Zisafel and his son Roy Zisafel. Engages in the development of hardware and software to protect against cyber attacks, including Denial of Service (DDoS) attacks.
Cyberark: Founded in 1999 by Ehud Mokidi and Alon (Nissim) Cohen. Engaged in the development of information security software, including software for secure file transfer.
Imperva: Founded in 2002 by Shlomo Kramer, Amichai Shulman and Miki Bodai. Engaged in information security software development.
Sentinel One: Founded in 2013 by Tomer Weingarten and Almog Cohen. deals with software for end station security.
Transmit Security: was established in July 2013 and deals with biometric identification of computer users and mobile computing devices.
Snyk: Established in 2015 by Unit 8200 graduates, and provides tools for detecting security weaknesses in open source components, and for developing secure applications.
Claroti: was established in May 2015 and deals with cyber protection for industrial facilities.
Aramis Security: was founded in November 2015 and deals with the security of the Internet of Things.
Orca Security founded in 2019 and Wiz founded in 2020 deal in cloud computing security software.
Pentra Information Security: was founded in November 2015 and deals with automated penetration testing.
Prominent exits in the field of cyber protection:
The company “Cyota”, founded in 1999 by Naftali Bennett (later Prime Minister of Israel) and others, was sold in 2005 to RSA for $145 million.
Fraud Sciences, founded by Shebat Shaked and Saar Wilf, was sold in 2008 to Paypal for $169 million.
Trusteer, founded in 2006 by Shlomo Kramer and Mickey Bodai, was sold in 2013 to IBM for approximately $800 million.
Aorato, founded in 2011 by brothers Idan and Ohad Plotnik and Michael Dolinsky, was sold in 2014 to Microsoft for $200 million.
Imperva: Founded in 2002 by Shlomo Kramer, Amichai Shulman and Miki Bodai. Engaged in information security software development. Sold at the end of 2018 to the Toma Bravo Foundation (NA) for 2.1 billion dollars.
Prominent activity in the cyber offensive field
An group. ace. or. Technologies, controlled by the Francisco Partners Foundation, which develops software for cyber warfare and digital espionage, and sells its products mainly to governments, with the approval of the Ministry of Defense. Its main product is a rug called Pegasus. Another prominent company in this field is Candiro. On November 3, 2021, the United States included these two companies in the list of entities that act against the national interest of the United States. They were added to the list due to evidence that they developed and supplied spyware to foreign governments.
Celebrity, which focuses mainly on developing software and hardware for retrieving, sharing and analyzing data from mobile devices, the documentation of phone calls, and in addition social networks, computers and data sources found in the cloud.
Verint Systems dealt in the development of intelligence systems for the defense market, and in February 2021 this activity was split into a new company called Cognyte.
NSO company
“Meta” company
Cognite Company
