Cybereason Wins $100m Investment From SoftBank

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The founders of Cybereason: Yonatan Striem-Amit, CEO Lior Div and Yossi Naar.
The founders of Cybereason: Yonatan Striem-Amit, CEO Lior Div and Yossi Naar.Credit: Ryoji Suzuki

Cybereason, an Israeli-U.S. startup that helps businesses cope with cybersecurity attacks as they happen, said Wednesday it had landed a giant $100 million investment from Japan’s SoftBank Group.

The fundraising round was the biggest ever for Israel’s cybersecurity industry and one of the biggest by any Israeli startup in recent years. It was also unusual because SoftBank invested without any co-investors, and the money did not come from the company’s $93 billion technology fund.

“They came to us with a very good offer so there wasn’t any need to recruit outside investors,” said CEO Lior Div, adding that existing investors “are being diluted by the fundraising, but the valuation SoftBank gave us is generous and it isn’t taking control of the company.”

Cybereason was formed in 2012 by Div, Yossi Naar and Yonatan Striem-Amit, three Israelis with a military background in cybersecurity. It has taken in $189 million from investors Charles River Ventures, Lockheed Martin and Spark Capital. SoftBank, a multinational telecommunications and Internet company, first put money into Cybereason in 2015, the same time the startup opened a Japan office and entered the Asian market.

Cybereason, which has offices in Tel Aviv, Tokyo, Boston and London, has 300 employees, more than a third of them women, Div noted.

The latest fundraising round also has a business element to it as SoftBank is one of Cybereason’s biggest customers and distribution partners.

“Our strengthened partnership with SoftBank, which has a formidable sales force and enterprise customer base in Japan and a global reach, will also let us further expand our presence in the cybersecurity market,” Div said.

The startup uses artificial intelligence to track hackers as they move through a company’s network, without the need for human supervision. Demand is skyrocketing as high-profile attacks like the WannaCry ransomware attack occur more frequently. That attack last month infected 300,000 computers in more than 150 countries.

“Too much of the security industry focuses on building walls, but you can’t build a big enough wall to keep the bad guys out,” Div told the tech news site VentureBeat. “Businesses need to concentrate on what happens once the adversaries are inside.”

Cybereason’s fundraiser comes amid a series of $100-million-plus rounds in the last two months by startups like CrowdStrike, a cloud security platform; Cylance, a next-generation antivirus software maker; and Illumio, which secures data centers and cloud services.

Div said he wasn’t worried about the competition in what was now a fragmented industry ripe for consolidation.

“We’re here in order to build a big company, and that hasn’t happened in Israel in a long time, since the [2014] initial public offering in CyberArk,” he said. “The fundraising will enable us to continue growing by creating new distribution channels.”

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