Israeli cybersecurity industry- looking back at 2016

Israeli cybersecurity industry- looking back at 2016

Israel is a major force in cybersecurity innovation and development, and Israeli cybersecurity companies are at the forefront of technology, rubbing shoulders with global industry giants. In fact, according to CyberDB data-bank, Israel has the second largest amount of cybersecurity companies in the world, second only to the US. In terms of actual sales Israel cybersecurity exports account for anything between 5-10% of the global cybersecurity market , an amazing figure given Israel’s miniscule size and small population.

Cyber companies per country


Israeli cybersecurity Industry in 2016

In 2016 there were 9 Exits/ M&As of Israeli cyber companies with an average price tag of $60 Million.

During this year cyber companies had 40 startup companies raised capital in a total of $360 million and an average funding round of #9 Million USD.

The total investments and Acquisitions in the Israeli cyber industry in 2016 totaled around $850 Million. 

Israeli cybersecurity startups are covering almost all cyber categories, but there is a certain bias towards the following major competencies:

  • Threat Intelligence systems, services as well as automatic tools for monitoring web and dark web. Offering real-time threat feeds and or periodic reports for forensics and integration security system
  • Cloud Security, mainly around CASB category
  • Automotive security and connected car security
  • EUBA; Entity and User Behavior Analysis, heuristic analysis and data mining for detecting APT at networks and endpoints
  • ICS/ SCADA security, OT / industrial automation security, including OT network monitoring and visibility and alerting based on behavior analysis
  • Incident response and investigation automation based on integrations with other enterprise IT solutions and data mining capabilities
  • Mobile security, for highly secured mobile devices.  including voice and data encryption, protection against hi-jacking by malicious networks and prevention of APT and malicious agents protection

Israeli cybersecurity leadership origins

Israel’s’ leadership in this field stems from myriad reasons, including its geo-political situation, tech- savvy workforce and startup culture. Israel has been fighting foreign armies and domestic terror throughout its existence, and has for a very long time invested resources in bolstering its intelligence capabilities.

The IDF and Unit 8200

Unit 8200 is the largest unit in the Israel Defense Forces, comprising several thousand soldiers. It is comparable in its function to the United States‘ National Security Agency and is a Ministry of Defense body just as the NSA is part of the United States Department of Defense.

Unit 8200 cyber security, cyber offense, encryption and OSINT intelligence (web intelligence, threat intelligence, communication intelligence and signaling intelligence) is responsible for producing high skilled cyber experts after spending 3 years in the Israeli army. Most of Israel’s founders and members of management teams of new cyber start-ups have spent their army service in Unit 8200.

The IDF has additional units dealing with cybersecurity- both offensive, defensive and operations. According to foreign sources, the IDF is now one of the leading cyber forces in the world and it intends to keep investing and maintaining its technological superiority .

The IDF is like no other army in the world- in the sense that young recruits spend 3 very intense years in training, developing and operating the worlds’ most sophisticated systems. In a process that takes years in similar units at other armed forces, recruits are taught how to hack and defend, develop tools and systems and gain operational experience, equivalent to many years of civilian training and operation.


Following the compulsory military service the soldiers usually go on to study at Israel’s universities and technological institutions, which are amongst the best in the world. Upon graduation (and in many cases, during their studies) they will be recruited by one of Israel’s’ established technology companies or multinationals (such as Google, Facebook and Samsung- all of which have local R&D centers). By the time such a technologist reaches the age of 28 he has literally a decade of experience in multiple technologies, often with substantial managerial experience and business skills.
Coincidently, this is the age many people decide to found their own companies or join their friends, colleagues and ex- servicemen in new startups.

In addition, older, skilled immigrants hailing from the former USSR also participate in the technological workforce, adding unique skillset and academic know-how in mathematics, encryption and computer science.

VC and Startups

Israel’s startup scene is second only to Silicon Valley, and is currency estimated to host about 5,000 startups. In fact- Israel has more tech startups and venture-capital funding per head of population than anywhere — even the United States.

Government involvement

In addition to the significant role played by the IDF, Israeli government also contributes to the local industry, either by R&D grants (given by the Chief scientist) or by investments made by the recently created cyber bureau and the Nation cyber Authority.

Summary report

The following report is an excerpt of a more detailed report that includes an in-depth analysis of each of the financial transactions and the vendor’s and investors activities.

You can download the report here .

The detailed report can be purchased through CyberDB. Please contact us at for further information

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