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Israel’s Cybereason, backed by Softbank and Alphabet, files for IPO at $5b valuation

American-Israeli company, also backed by former US treasurer Steve Mnuchin’s fund, expects to go public later in 2022

Ricky Ben-David is The Times of Israel’s Tech Israel editor and reporter.

Cybereason co-founders, left to right, Yonatan Striem Amit, Lior Div and Yossi Naar. (Cybereason)
Cybereason co-founders, left to right, Yonatan Striem Amit, Lior Div and Yossi Naar. (Cybereason)

US-Israeli cybersecurity firm Cybereason, which uses behavioral analytics to discover threats, has confidentially filed for an initial public offering (IPO) that could value it at more than $5 billion, Reuters reported on Tuesday citing individuals familiar with the unfolding deal.

According to the report, Cybereason has finalized underwriters for the IPO, which may be launched in the second half of 2022.

Cybereason was last valued at over $3 billion when it raised $275 million in funding last July led by Liberty Strategic Capital, the private equity firm set up in early 2021 by former US Treasury secretary Steven Mnuchin. Cybereason was the fund’s first investment. Mnuchin joined the Cybereason board of directors, and Liberty’s senior adviser, General Joseph Dunford (Ret.), who served as chairman of the US Joint Chiefs of Staff in 2015-2019, joined its advisory board.

Additional backing for that last round was provided by Irving Investors and Japanese tech investment giant Softbank through its Vision Fund 2. SoftBank Corp., a subsidiary of SoftBank Group, is one of Cybereason’s biggest investors and one of its biggest customers.

In October, Cybereason nabbed an additional $50 million from GV, previously known as Google Ventures and the venture capital arm of Alphabet, according to financial information available on Start-Up Nation Central’s finder database

Mnuchin said in July that Cybereason “has established itself as a visionary in prevention, detection and response, and Liberty Strategic Capital is excited to partner with the Cybereason team in their cutting-edge work to defend critical information networks, businesses, and governments around the world against the growing danger of cyberattacks. We are confident in Cybereason’s ability to deliver a superior product to customers and provide best-in-class critical infrastructure defense.”

Founded in 2012, Cybereason has raised over $700 million in capital over the past decade, including previous rounds led by Softbank, with participation from CRV, Spark Capital, and Lockheed Martin.

Based in Boston, Cybereason uses behavioral analytics and machine learning to process information in real-time and provide extended detection and response (XDR). The software can tell companies if they are under attack, assesses their impact, and move to stop the threat, according to the company’s website.

“Cybereason takes an approach that enables defenders to end malicious operations instantly, resulting in the most comprehensive prevention, detection and response solution on the market. This is how we are returning the high ground to the defenders – and we are just getting started,” said Lior Div, the CEO and co-founder of Cybereason, in July.

The company says it has customers in over 40 countries and offices in Tel Aviv, Tokyo, London, Sydney, Asia-Pacific and continental Europe.

In 2019, Cybereason uncovered Operation SoftCell, a massive hack of several global telecommunications companies involving the theft of vast amounts of personal data, apparently carried out by state-backed actors in China.

On Tuesday, Cybereason announced that it discovered “previously unidentified malware variants” leveraged in two separate Iranian state-sponsored cyberespionage operations targeting a wide range of global organizations.

Israel’s cybersecurity field is one of the strongest sectors in the tech industry, raising a record $8.8 billion and producing 11 new unicorns, or private companies valued at $1 billion or more, in 2021.

The annual 2021 figure accounts for 40% of the total funds raised by cybersecurity firms worldwide last year, according to data by the Israel National Cyber Directorate.

According to Israeli Export Institute data, overall cybersecurity exports from Israel were estimated at $11 billion in 2021.

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