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Israeli cybersecurity firms raised record $2.9 billion in 2020 amid pandemic

Industry accounts for 31% of global investments in cybersecurity sector, second in world, National Cyber Directorate says; Israel has 33% of global sector unicorns

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative image of hacking, hackers, ransomware and a cybersecurity attack (solarseven; iStock by Getty Images)
Illustrative image of hacking, hackers, ransomware and a cybersecurity attack (solarseven; iStock by Getty Images)

Israel’s cybersecurity industry posted a 70 percent growth in funding in 2020, raising a record $2.9 billion in 100 transactions as the coronavirus pandemic triggered a global transition to online activities, the Israel National Cyber Directorate said on Thursday.

Israel’s cybersecurity industry accounted for 31% of global investments in the sector in 2020, putting the nation in second place after the US, the directorate said. Exports of cybersecurity products in 2020 totaled $6.85 billion, up from $6.5 billion in 2019.

Last year saw more than 20 acquisitions of Israeli cybersecurity firms for a total of an estimated $ 4.7 billion, the directorate said in a statement.

Five Israeli cybersecurity firms reached unicorn status in 2020, the directorate said. Unicorns are privately held companies that have reached valuations of over $1 billion. These were Snyk, SentinelOne, Cato Networks, Forter and BigID. According to this data, Israel now accounts for 33% of global unicorns in the cybersecurity sector, the directorate said.

“The coronavirus has caused an unprecedented shift in the volume and pace of physical activity into the online space,” which has set the scene for increased cybersecurity threats requiring all parts of the economy to gear up for protection, said Roi Yarom, director for economy and growth at the cyber directorate.

“The growing threats have created additional opportunities for the Israeli cyber industry, which has proven once again this year that it is a national growth engine and an essential component of national resilience.”

As all things go digital amid the pandemic — from shopping to business dealings — hackers have been given a wider playing field in which to operate, and cybersecurity incidents have surged this year, from phishing to ransomware threats to attacks on hospitals.

The directorate invests resources in the field including in academic research, and this will “continue to drive the wheels of industrial innovation,” Yarom added.

The directorate is also working to improve and increase human capital in the field, create relationships with countries with potential for commercial opportunities, joint research and development programs with startups and mature companies, and connect entities in Israel and abroad with the local industry, he said.

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