Singapore Investment Giant Buying Israeli Cybertech Firm Sygnia for Around $250 Million

In a record exit, the cyber-consultant’s owners will reap more than 50 times their initial investment in the sale to Temasek, a source says

Sygnia, a cybertech consulting company, announced Tuesday it was being sold to Singapore’s Temasek Holdings in a deal that sources say is probably worth $250 million.

To date, some $4 million has been invested in Sygnia.

A source familiar with the details said the current deal is unprecedented in Israel over the past decade: a return of more than 50 times the initial investment.

Sygnia is one of a clutch of companies to arise from Team8, which forms and invests in cybertech companies.

Team8’s founders include Nadav Zafrir, Sygnia’s chairman and a former head of the Israeli army’s famed 8200 signal intelligence unit. This is Team8’s first exit.

Sygnia said it would continue as an independent company and continue hiring.

Temasek, which owns companies and funds worth billions of dollars, is snapping up Sygnia to protect its own digital assets and bring in customers.

Sygnia was founded in 2015 by Chief Executive Shachar Levy, VP-enterprise security Ami Kor and VP-incident response Ariel Smoler. As of last year, the company reported that it was profitable.

Sygnia uses the platform it developed to connect to the networks of large companies when they come under cyberattack or experience a security breach.

Dedicating several employees to each customer, Sygnia works to thwart cyberattacks as they happen. It also analyzes the attacks and helps its customers recover and prevent future incidents.

As of 2017, Sygnia employed 60 people, of whom 90% served in Israeli Military Intelligence.

This is Temasek’s most significant acquisition in Israel, said the source familiar with the deal, noting that Temasek had hitherto sought to distance itself from any identification with Israel.

“Until now they operated here via Israel venture capital funds such as Vertex and Red Dot,” the source said. “This is the first time they’ve come and put down a big check.”

In early September, Temasek took part in a $6 million investment in ZenCity via Vertex. ZenCity measures people’s satisfaction with municipal services. Last year, Temasek invested $15 million in Integra Holdings, an Israeli biotech holding company.

Temasek also indirectly led a $25 million fundraising round in U.S. company Puls, which was founded by Israelis Itai Hirsch and Eyal Ronen. Puls offers to repair electronic devices and have them back at the customers’ homes within an hour.

Temasek is looking to build a Singaporean cyberplatform in Israel, and is likely to make more acquisitions soon, the source said.

Asked whether it was strange that an investor would buy a consulting company, the source said that “Sygnia is very profitable and reaches the world’s largest customers.”

Sygnia’s employees are likely to be well compensated for the deal, the source added. “You’re buying a company based on its human capital, and that needs to be preserved.”

Team8 has raised $42 million since its founding in 2014. Every few months, the group announces the founding of a new company, which receives $5 million in funding and is then set to fend for itself, albeit from within the same building as Team8, which offers guidance.

To date, Team8 has launched six companies: Illusive, Claroty, Hysolate, Portshift, Duality and Sygnia, which focus on different aspects of cybersecurity.

Team8 will be passing on all the profits from the Sygnia sale to its investors.

Team8 executives.Credit: London Stock Exchange



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