Traditionally strong on securing computer networks and cloud infrastructure [some 15% of cyber companies are in this field], a new wave of connected device security companies accounted for one of every three newly-founded cyber start-ups in 2017.
By mid-2018, there were some 430 active cybersecurity companies in Israel, 71 of them founded in 2017 and 30 more in the first half of 2018. Edge computing cyber start-ups now make up the largest vertical in the industry.
The future of cybersecurity
While estimates vary as to the number of connected devices in the world, there is no argument that almost everything we will use in the future is going to be connected to the Internet. That widens the possibilities of malicious hacking – once confined to our PCs and laptops – to printers, smart TVs, streaming media players, speakers, cameras, phones, switches and routers, and even baby monitors, fitness devices, kitchen appliances, children’s toys, and almost anything else you can imagine.
“This emerging subsector represents where cybersecurity is headed. This is where the most advanced work is happening,” says Nir Falevich, cybersecurity sector lead at Start-Up Nation Central.
The overall Israeli Cybersecurity sector is solidified as a world power, coming second only to the U.S. and taking some 16% of overall cyber investments worldwide. In 2017, Israeli cyber companies raised $814.5M in venture capital and private equity investment – a record-breaking amount for the third year in a row, exceeding 2016 investments by 28%. By mid-2018, cyber companies raised around $520M.
Attractive to multinationals
The sector continues to be attractive to multinational companies, 30 of which have cybersecurity-related R&D centers in Israel. Several new international players have recently entered the local industry, opening R&D and cyber innovation centers, including Symantec, RBC, TD Bank, Renault, Daimler AG, and Harman.