Moody’s Corp., the ratings agency, and Israel’s Team8, a cybersecurity think tank and investor, said Thursday they will be setting up a joint venture for what they hope will become a global standard for evaluating how vulnerable companies are to cyberattacks.
The joint venture will combine the ratings agency’s expertise at developing methodologies and global standards to measure credit risk with Team8’s expertise in the field of cybersecurity, the two firms said in a statement.
This risk assessment tool will serve the needs of boards of directors, audit committees and chief executives, among others, to understand the cybersecurity risks firms may be exposed to and assess this risk against that of other firms and over time. The assessments will also help possible acquirers understand the cybersecurity risks facing their acquisition target, as well as help measuring risk when acquiring a cyber insurance policy.
In 2018, Moody’s made a strategic investment in Team8, set up by graduates of Israel’s elite military intelligence Unit 8200.
Derek Vadala, who has been at Moody’s for 16 years and most recently served as the US firm’s managing director, Global Head of Cyber Risk, will lead the newly set up joint venture firm as chief executive officer, the statement said.
“The combination of Team8’s industry-leading knowledge and experience in cybersecurity and Moody’s expertise in analyzing and quantifying financial risk allows for the creation of a unique capability to serve as a standard for cyber risk assessment,” said Vadala in the statement.
The firms did not disclose financial details of the deal.
“There is a real necessity in the marketplace for an efficient, objective and independent assessment mechanism to assess the cyber posture of companies around the world,” said Nadav Zafrir, co-founder and CEO of Team8. He said the firms are setting up “a first-of-its-kind global standard for evaluating the complex cyber risk facing enterprises.”
Team8 has received funding from investors including Cisco, Microsoft, AT&T and Walmart.
As the world becomes more digitalized and home and office gadgets smarter, the threat of cybersecurity breaches grows. The global cybersecurity market is expected to grow from $153 billion in 2018 to $248 billion in 2023, according to data firm MarketsandMarkets.