Israel is well-known for producing leading publicly-traded cybersecurity companies such as Checkpoint, CyberArk, and Varonis, but the ever-growing number of private Israeli companies in this field is staggering and has venture capitalists, CISOs, corporate development teams, and bankers shuttling to Israel on a monthly basis. Next week is CyberTechTLV, the largest cyber tech event outside of the US, and fittingly it is hosted in Tel Aviv.
Eighteen months ago our firm mapped 120 Israeli cybersecurity startups to serve as an internal guide for ourselves and as a public resource for visitors to the Israeli cyber security scene. Today, the landscape has grown to encompass 150 companies, including 40 new startups. We divide these companies into 16 distinct categories, with two new categories: “deception” and “software development life cycle.”
While there is some minor overlap among categories, and some companies that could find a home in more than one category, we hope this landscape can continue to serve as a useful guide to professionals who closely follow the cybersecurity innovation coming out of Israel.
More capital, less M&A
Looking at the last couple of years in the Israeli cybersecurity industry, the most obvious takeaway is that the amount of capital invested in Israeli cyber tech has doubled from $294 million in 2014 to $606 million in 2016. Some of this surge can be attributed to the activities of the new cyber foundry, Team8 — which raised about $80 million last year for its portfolio of startups — as well as larger follow-on venture financings across the board.
The second most intriguing finding was the dearth of cybersecurity M&A in 2016, which at $490 million actually represents the worst year since the category began to attract attention. We believe this is not due…