Speed, agility seen as Israel’s edge in cyber-war

65 new cyber startups were set up in Israel in 2016, and nation maintains spot as a global player in cybersecurity, report says

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

Participants at Israel's CyberTech 2016 conference (Courtesy: Gilad Kavalerchik)
Participants at Israel's CyberTech 2016 conference (Courtesy: Gilad Kavalerchik)

Israel’s proven agility to come up with solutions quickly is one the key factors that puts the nation in a leading position in the battle against cyberattacks, said Erez Kreiner, a former director of information security at Israel’s Shin Bet security service.

“We act as a speedboat as opposed to a naval carrier, and that is our advantage,” he said in an interview with The Times of Israel. “In the war against cybercrime you need immediate reactions.” Some countries are good at coming up with robust and thorough solutions over a period of time — the naval carriers. Israel’s advantage is its quick ingenuity in the face of new challenges, he said.

Cyber-challenges are moving very fast and becoming more and more intense, he said, and they are sponsored both by individual hacker groups and by nation states.

Kreiner, who was also a director at Israel’s National Cyber Security Authority, today heads his own cybersecurity consulting company.

As the world moves toward greater digitalization, it becomes more vulnerable to cyberattacks. At the end of 2015 hackers shut down power in Ukraine. In February 2016 more than $80 million was stolen from Bangladesh’s account at the Federal Reserve Bank of New York, and US intelligence services have blamed Russia for hacking attacks during the 2016 presidential election campaign.

Erez Kreiner, a former director of information security at Israel's Shin Bet security service now heads his own cyber-security consultancy (Courtesy
Erez Kreiner, a former director of information security at Israel’s Shin Bet security service now heads his own cyber-security consultancy (Courtesy

“Definitions about what is considered a cyberattack and how many there are a day or a month vary,” he said. “What is important to note, however, is the intensity and sophistication of the attacks,” which have been growing over the years.

State-sponsored attacks are more intense than those perpetuated by individual hackers, he said: nations have more resources and less fear of being discovered. In addition, as opposed to conventional weapons, for cyberwarfare requires less investment and development times are faster.

Israel’s Shin Bet domestic security service has been in charge of protecting the nation’s critical infrastructures since 2002, and today, some 25 percent of its workforce is dedicated to fighting cybercrime, Kreiner said. When the unit was set up in 2002, “cyber” was a word not many had heard, he said. Today things are very different.

“If there were no defenses in place already, the world would be witnessing chaotic events,” he said. “Cybersecurity is becoming a central part of our daily lives.”

Record amounts raised in 2016

Sixty-five new cyber startups were set up in Israel in 2016, and Israel maintained its leading position as a global center of cybersecurity innovation, a report by the non-profit Start-Up Nation Central reveals. The report was released in conjunction with Israel’s Cybertech 2017 Conference, which opened Monday and runs through February 1.

A record $581 million of capital was raised last year, a 9 percent increase compared to 2015. This amount was second only to the US, and accounted for 15% of the total venture capital raised by cybersecurity companies globally. At the end of 2016 there were 365 cybersecurity companies active in Israel, compared to 187 in 2012, according to data compiled by Startup Nation’s database and PitchBook.

The industry in Israel is growing more mature: seed funding, or Series A investment rounds, were on average 44% higher than in 2015. There were fewer exits in 2016, in the form of company acquisitions or initial public offerings of shares. This may testify to the growing maturity of the sector, as shareholders wait to reach higher levels of growth and maturity before selling their stakes, the report said.

Multinational corporations in Israel have expanded their presence in the cyber security sector: Huawei for example bought of Hexatier and Volkswagen AG started CyMotive Technologies to provide security solutions for connected cars. More than a third of funding for Israeli startups came from corporations, up from 25 percent in 2015, the report said.

The local companies are active mainly in network security (67), anti-fraud and authentication (48) and data protection (41). Between 2015 and 2016, the IoT and automotive security sector grew significantly, with 14 companies set up in this field, the report said.

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