Zirra Market Analysis Cybersecurity Trends in Israel and New York
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Zirra Market Analysis Cybersecurity Trends in Israel and New York Methodology The Zirra Analysis Market Report is synthesized from many inputs, most notably the wisdom of the crowd, the output of aggregation and data collection technology, and the ratings and metrics produced by our proprietary algorithms. The report is built on external and public information on a company or companies, and provides insights and conclusions obtained from that information. None of the opinions or insights belong to any Zirra employees. All of them are grounded in the integration of a variety of sources. Some statements may sound opinionated, but these are the composite of relevant inputs and crowd opinions, vetted against similar historical situations of comparable companies. Fact We use no inside information. Information offered in the report that is usually non-public by nature, such as revenue figures, trade secrets, share structures and others, may be missing or somewhat inaccurate in the report. In some cases, such as with valuations, the numbers are generated by our algorithmic models. We do get help from industry experts. We factor their opinions into the algorithm as well as into the qualitative sections. Experts that speak on the record are usually accessible for further questions. Some experts choose to stay anonymous, and in these cases we can provide detailed logs of their contributions (that still maintain their anonymity). Mathematical figures such as ratings and valuations are based on our proprietary algorithms. The intended purpose is as a benchmark for your own process; we cannot “prove” validity of these outputs. In addition, we provide a lot of raw collected data. This is what our aggregation and collection technology has gathered and flagged as important for the company in question. We provide it as the factual basis for the synthesized statements in the report, and for you to do further analysis on if you wish. Finally, we do not recommend whether or not to invest. Our duty is to help you perform your job better. We pride ourselves on bringing transparency to our customers. Similarly, we encourage you to always be transparent, open, and candid with us. Key Benefits ● A timeline overview depicting relevant companies’ evolutions, enabling a reader to get to know the respective company in a snapshot view. ● A summary of industry trends that pertain specifically to the market and localities in question. ● Similarly derived, key insights into possible risks & success factors. Table of Contents Methodology Fact Key Benefits Background Key Findings Market Israeli Market New York Market Solution Trends and Insights Israeli Trends New York Trends Competition Israeli Startups Opportunities Risks Strategic Considerations New York Startups Opportunities Risks Strategic Considerations Multinational Companies of Note Accenture CyberArk EY Herjavec IBM Competitor Profiles BioCatch Cato Networks Cybereason Deep Instinct Illusive networks ThetaRay Claroty Flashpoint HYPR Corp Security Scorecard Situation Analysis Background The need for strong protection against cyber-attacks has never been greater, as the complexity and cost of cybercrime damage keeps increasing every year. The continued evolution of these threats results in a sustained funding flow, despite the saturation and hype in the market. Further, the space is seeing frequent and profitable M&A deals, equally attracting the attention of both investors and entrepreneurs. Israel attracts 15% of the global investment in cybersecurity. The country's cybersecurity cluster is one of the strongest in the world, with top talent being produced at the intelligence units of the IDF. While the local market is small, the competition for talent in the space is significant. New York is the financial capital of the United States and has the largest customers in financial services in the Western World. It's a gateway for business, but still developing as a cyber hub. New regulation will significantly accelerate the development of the cyber security cluster in New York. Key Findings Market MarketsandMarkets reports that the cyber security market was estimated to be worth $137.85 billion in 2017 and, growing at a CAGR of 11%, is predicted to be worth $231.94 billion by 2022. Factors facilitating this growth include the growing security needs of the Internet of Things (IoT) and Bring Your Own Device (BYOD) trends, as well as increased deployment of web and cloud- based business applications. According to Cybersecurity Ventures, cybercrime damage costs are expected to grow to $6 trillion each year by 2021, up from $3 trillion in 2015. Further, Gartner reports that worldwide spending on information security products and services will reach $86.4B in 2017, an increase of 7% over 2016, with spending expected to grow to $93B in 2018. The global cybersecurity space saw numerous venture capital and M&A deals during 2017. Financing deals hit an all-time quarterly high of 146 deals in Q1 ’17, showing a 26% increase from the previous quarterly high. Diverse companies closed three-figure rounds of funding - including SmartSky Networks ($170 million), Netskope ($100 million), Illumio ($125 million), Cybereason ($100 million), and BlueteamGlobal (over $125 million). Some of the largest M&A deals of the previous year include Micro Focus’ acquisition of HPE’s IT management, big data and security lines for $8.8 billion, Intel’s acquisition of Mobileye for $15.3 billion, Advent International’s acquisition of Morpho for $2.7 billion, DigiCert’s acquisition of Symantec’s website security and PKI solutions business for $950 million in cash and 30% of DigiCert’s common stock, Symantec’s acquisition of Fireglass in July and Gemalto’s purchase of 3M’s identity management business for $850 million. Israeli Market Israel attracts 15% of the global investment in cybersecurity. The country’s cybersecurity cluster is considered one of the strongest in the world, with top talent being produced at the intelligence units of the Israel Defense Forces. While global investment in cybersecurity startups has shown signs of stagnation in recent years, Israel – second only to the U.S. market – has remained strong and showed impressive numbers, experiencing a surge in funding and continued innovation. During the first half of 2017 Israeli cybersecurity startups raised $434 million in 28 rounds, showing a 25% increase in the total funding sum against the same period on the previous year although the number of rounds remained similar. The average round rose 7% to $15.5 million. During this same period, four startups were sold for $272 million, which represents a 160% rise in the sum of M&A deals and is a testament to the strength of the market. The majority of this sum came from the acquisitions of LightCyber by Palo Alto Networks ($130 million), and Hexadite by Microsoft ($100 million). Albeit impressive, these numbers are still far from previous M&A deals in the space such as Adallom’s acquisition by Microsoft for $320 million in 2015 and Trusteer’s acquisition by IBM for $1 billion in 2013. Another noteworthy acquisition in the Israeli market is Fireglass’ acquisition by Symantec. The purchase price of this deal was not disclosed but it is thought to be around $250 million. Symantec has been a leading serial acquirer of security companies in recent years, gobbling up Lifelock for $2.3B earlier this year and Blue Coat for $4.65B in 2015. New York Market The United States houses 63% of the world’s privately-owned cybersecurity companies, 33% of these being based in California. New York holds the 4th place with 6% of the cybersecurity companies in the US, after Virginia (8%) and Massachusetts (7%). CBInsights found that the most well-funded privately-owned cybersecurity company in the US is the California-based endpoint protection company Tanium, with $395M in total disclosed funding. This is followed by Maryland’s Tenable Network Security with $302M raised to date, and then California- based smartphone security company Lookout, with $281M. According to the report, the three most funded cybersecurity companies in New York, as of September 2017, are Payfone ($69M), Dashlane ($50M), and Flashpoint ($43M). New York City is regarded as the finance capital of the world and has been ranked at the top of the World’s Financial Center report by the Global Financial Centers Index (GFCI). New York is the home to Wall Street, the most active stock marketplace and the New York Stock Exchange, the largest stock exchange by market capitalization. The city houses some of the largest Fortune 500 and Fortune 1000 companies, as well as banks such as Goldman Sachs, Morgan Stanley, Merrill Lynch, and JP Morgan. New York’s position as a financial capital makes the city vulnerable to cyber attacks. August 28, 2017 was the first compliance date of the nation’s first cybersecurity regulation. The New York regulation requires banks, insurance companies, and other financial services institutions to have a cybersecurity program designed to protect consumers’ private data; a written policy or policies that are approved by the board or a senior officer; a Chief Information Security Officer to help protect data and systems; and controls and plans in place to help ensure the safety of the city’s financial services industry. Solution Trends and Insights Organizations are constantly facing new kinds of cybersecurity challenges, resulting in a continual need to stay on top of new technology developments and adapt their protection accordingly. Main threats include the constant spike in the sophistication of hackers and attacks, the rising tide of ransomware, and the emergence of new connected platforms that require special protection - such as IoT devices, connected vehicles, and AI industrial machines. Israeli Trends Some of the emerging technologies and trends in Israel include: ● Funding deals in recent years show that investors are looking to back platform solutions rather than niche or single-purpose products, with mobile security, vulnerability & risk management, network security, SCADA security, and incident response being the most funded fields.