Benjamin Netanyahu, Israel's Prime Minister, once said that cybersecurity is one of the great businesses growing geometrically because there is no permanent solution to cyber threats and data breaches. With great efforts ($193 billion industry worldwide in 2024 and is projected to touch $563 billion in 2032) being invested in research and developing solutions to thwart cyberattacks, Israel has become a hub for top cyber security companies.
Today top cyber security companies in Israel operate to help many smaller countries like the US, Singapore, Australia, and several other European countries to develop cybersecurity ecosystems. Israeli cybersecurity exit deals grew by 65% in 2023 to $7.1 billion.
Cybersecurity remains the most active tech vertical in Israel. It accounted for $1.4 billion (26%) of total funding. Out of the recent cybersecurity startup acquisitions, almost 80% of companies were from Israel which shows the dominance Israeli cybersecurity companies have in this sector.
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Largest Israeli cybersecurity companies acquired recently
1. Talon Cyber Security - Acquired for $625 million by Palo Alto Networks
2. Zscaler acquired Israeli AI security startup Avalor for about $310 million
3. Perimeter 81 - Acquired for $490 million by Check Point Software
4. Axis Cybersecurity Ltd - Acquired for an estimated $400 million by Hewlett Packard
5. BioCatch was acquired by Permira Growth for $750 million
6. Tenable acquired Ermetic for $265M
7. Okta acquired Spera Security in the range of roughly $100-130 million
8. Bionic - Acquired for $350 million by CrowdStrike
9. Dig Security - Said to be acquired for $400 million by Palo Alto Networks
10. CyberArk purchased cybersecurity firm Venafi in a deal worth $1.54 billion
11. Wiz acquired cloud detection and response firm Gem Security for $300-400 million
12. Google acquired Siemplify for $500m
For this success to be achieved, several factors have played a part, which are as follows.
Investing in human capital to build future-oriented cybersecurity teams
The top cyber security companies in Israel consider people's skills, experience, and ambitions as the essential ingredients of cyber defense. The Israeli government has channeled its people into specific academic pursuits that offer excellent knowledge of cybersecurity. It’s one of the best cybersecurity Israeli mechanisms.
Due to this, there are about six universities in Israel that are research centers dedicated to cybersecurity. Tel Aviv University's cybersecurity course has been ranked number one in the world.
Through its efforts, great companies have come into play, offering to solve cybersecurity problems with a highly skilled workforce. In times when cybersecurity-specialized manpower is not available in desired numbers in the market, companies hope to develop solutions for the available workforce and also the distributed workforce brought about by the new work modes after the pandemic. It will ensure that employees are taking data through the secure confines of their organization's network. This innovation and dynamism of these companies have helped increase the value of Israel cybersecurity companies’ stocks.
Culture of interdisciplinarity and diversity
While cybersecurity requires technological solutions, the problems with the issues of cybersecurity are not technical. This calls for applying an interdisciplinary approach to cybersecurity to understand the sociological, legal, psychological, economic, and other domains affecting it.
The government has enhanced diversity by allowing different companies or firms in the private sector. Other innovative Israeli cybersecurity companies have grown through this, including Cyrebro, CyberArk, Medigate, Talon, Argus Cybersecurity, Axis Security, and SAM Seamless Network. Many of these have found investors who have either acquired them or provided funding to help them grow further.
These companies' shared experiences of different professionals and enduring cross-pollination drive the significant steps being achieved. This has increased Israeli cybersecurity companies' stock value rapidly.
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The government as a business catalyst for Israeli cybersecurity startups
Not only has the government played a part in launching and sustaining the thriving technology sector, but it has also catalyzed the rapidly growing cybersecurity startup sphere. As the government views cybersecurity as an "economic growth engine," Israel gains a competitive advantage based on leading-edge research and unique practical experience.
Also, the government acting as a catalyst has contributed to international cooperation and increased goodwill toward Israeli cybersecurity startups and other established companies. This has favored many Israeli cybersecurity companies right from the start. Through these collaborations, Deep Instinct, a cybersecurity startup that uses deep learning AI to defend against malicious attacks in "milliseconds," has raised about $100 million.
In 2021, it turned out an M&A offer and raised $43 million buoyed by the growth potential. The company again got backing from PayPal ventures in 2023. In total, Deep Instinct cybersecurity company has raised $343M so far. This shows the confidence and backing that Israeli cybersecurity companies work with.
The government as a coordinator
The cybersecurity ecosystem is constantly evolving its frameworks for collaboration between the government, universities, and businesses, with the government performing the advisory role. According to Dr. Eviatar Matania, cyberspace is global and critical to a country’s security so it has no national borders restricting other countries from joining its research.
Through government coordination, Israel has become a source of fantastic innovation, with a large part of global cybersecurity software being developed there. According to Einat Meyron, an Israeli cyber resilience expert, Israel's activities are immeasurably more extensive than those of most countries in the world. Also, the government has a strong military system that young people go through to ensure they have relevant skills.
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Rethinking the (cyber) box
Most companies that specialize in designing software used in cybersecurity focus on a typical approach to counter reactive and potential attackers. The new type of cybersecurity strategy the Israeli companies focus on has three levels which include robustness, defense, and resilience. In Israel, different entities have been assigned other tasks making the national policies fragmented and less-than-optimally coordinated.
In 2023, cyber exits accounted for 19 out of 45 transactions. The total was valued at $3.8 billion out of the total $7.5 billion of the entire tech industry. This was 51% of the tech sector’s total transaction value. This industry is not the only center on the local side but second only to the American cybersecurity sector globally.
There’s something to talk about on the other side too. With a wide-open field to operate in, the best Israeli cybersecurity companies in the US have had their own share of headlines in the dailies, sometimes for the wrong reasons and sometimes for their heroics.
Most of it has been regulations-related, so a tighter hand on the companies can make things better in the US and other countries that depend on Israeli cybersecurity startups and established companies’ innovations.
Most popular Israeli cybersecurity companies you should know about
Cloud Security and vulnerability management
Wiz - A cloud-native application protection platform (CNAPP).
Cyera - Data protection and security in cloud environments.
Eureka Security - Cloud Data Security Posture Management (DSPM) platform
Identity and Access Management (IAM)
CyberArk - Privileged access management (PAM). Safeguards privileged accounts and sensitive data.
Check Point - Check Point offers IAM solutions and network security solutions.
Fraud Prevention and Digital Identity
Cyabra - AI to detect and prevent fraudulent activities.
Crypto and Blockchain Security
Fireblocks - Secures transfer and storage of digital assets, mainly for cryptocurrencies and blockchain-based applications.
Paragon - Security solutions for the cryptocurrency and blockchain ecosystem.
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