A comprehensive report on the Israeli cyber industry released by the IVC research center will be presented for the first time at the international Cybertech Conference – the largest cyber-security conference outside of the U.S. – held for the 3rd year in Israel at the Israel Trade Fairs and Convention Center, opening on Tuesday, January 26.

The report presents an all-encompassing analysis of the Israeli cyber industry, including information about leading investors in cyber-security, an overview of active companies by stage and their annual growth rate, a case study of multinational corporations and cyber exits in the field, and more. 
Along with the report, an interactive map created by Weave is being released, showing over 170 venture-backed Israeli cyber technology startups and their ties to funds. The map offers an accessible and clear overview of the industry.


According to Or Riegler, CEO Weave, “The map gives the user an overview of the industry. The user can see the importance of the Chief Scientist, as well as the positions of other players in the industry. The map shows 173 companies backed by VCs and other major investors. According to the report, 78 Israeli cyber companies raised $540 million in capital, an increase of 20% compared to 2014. In 2015, Israeli cyber exits reached $1.2 billion, an increase of 40% compared to 2014.”
The report offers an overview of the rapidly growing Israeli cyber field, with an average of 52 new cyber startups established annually since 2000; over the last 6 years, this number went up to 60 startups established annually. The report’s findings show that 430 cyber companies are currently operating in Israel. 
Since 2011, more than 230 local and foreign investors invested in over 165 Israeli cyber technology startups. Investments in the Israeli cyber industry are noticeable in early & later stages alike.

Koby Simana CEO IVC: “Unlike other sectors within the Israeli hi-tech industry, the cyber cluster today is packed with a wide range of players in various stages. The Israeli government through the Office of the Chief Scientist, the bi-lateral funds and incubators program, the venture capital funds and angels, the corporate and accelerator programs – all are actively looking for opportunities to engage with leading cyber companies.” 
Of the leading investors in Israel, Jerusalem Venture Partners (JVP), which invests in early & later stage companies, is the most active investor in the Israeli cyber industry, and is currently working with nine active portfolio companies.

Gadi Tirosh, Managing Partner at JVP: “As the ferocity, scope and sophistication of cyber-attacks continue to grow, so must our capacity to defend our critical assets. As part of our investment process, we review about 90% of the Israeli cyber startups, and we are very excited by the level of creativity, know-how and innovation that we are seeing. The Israeli investment community is focusing on ‘outside the box’ solutions, which can help turn companies into global market-leaders. The talent here is world-class and Israeli cyber-security will continue to a big part of the solution to our global cyber-security challenges.”

The report shows that of the 430 active companies in the Israel cyber-security industry, the vast majority is privately owned; only 19 are public companies in the cluster. The majority of companies (55%) are generating revenues, with 9% of companies generating above $10 million in revenues annually.


One interesting finding relates to the level of the Office of the Chief Scientist’s (OCS) activity in Israel as a key factor in supporting early stage companies. The OCS, an arm of the Israeli government, provides the largest financial and developmental resources to the cyber industry in Israel. The OCS enables entrepreneurs to receive funding, allowing them to take higher technological risks. To date, the government is involved in about 70 cyber companies, allowing the Israeli cyber industry to be at the forefront of technology in Israel and on a global level.

“Over the past several years, the Israeli cyber-security industry has been gaining significance as a central pillar for the development of the hi-tech industry as a whole,” said Avi Hasson, Chief Scientist at the Israeli Ministry of Economy and Industry.” In order to bolster the competitive advantage of the Israeli industry in the global market, we are putting an emphasis on a number of areas: support for disruptive solutions with the potential to significantly influence the global cyber market, support for the creation of breakthrough technologies upon which large Israeli companies can be built, financial aid for companies to bridge the gap in the R&D process from “proof of concept” to working products, and creating integrative support mechanisms for industrial cooperation between firms, led by experienced companies in the field, to create large-scale cyber solutions for existing pain points in the market.”


The report also presents interesting data relating to the presence of multinationals in Israel; today there are nearly 40 foreign R&D centers operating in Israel, in the mid 90’s only 13 multinational corporations were operating in Israel.

Yaniv Harel, GM ,Cyber Solutions Group, EMC
: “EMC operates in Israel via five sites, that are active in various Information technology areas and employ more than a thousand people. This activity is based on organic growth and acquisitions of about ten Israeli companies, alongside other investments. EMC has comprehensive and diverse activity in the cyber fields, through RSA and the Cyber Solutions Group, based in EMC’s Beer Sheva site. The cyber activity is based on existing capabilities of the company and on technologies developed in Israel, which are combined into innovative solutions, adapted to customer’s needs worldwide. EMC is perceiving Israel as a strategic innovation hub and will continue to invest and to develop in the cyber field as well as in its other expertise areas.”

The Cybertech 2016 Conference is being held for the third year in Israel at the Israel Trade Fairs and Convention Center, Pavilion 2 on the 26-27 of January. It is the most significant conference and exhibition of cyber technologies outside of the United States. Cybertech will bring together leading multinational corporations, startup companies, major Israeli companies, investors, entrepreneurs, and distinguished international speakers in the field of cyber-security. It will also feature an exhibition hosting over 250 companies and 100 startups presenting innovative problem-solving strategies and solutions to challenges in a wide range of sectors.

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