Billion Dollar Unicorns: Is Cybereason the Next Cyber Security Company to get Acquired?

According to a MarketsandMarkets report, the global cyber security market is expected to grow 11% annually over the next five years to $231.9 billion from $137.85 billion in 2017. Recent cyber attack reports such as the Equifax breach have increased interest in the segment. Billion Dollar Unicorn club member Cybereason is already benefiting from the increasing interest and market growth.

Cybereason’s Offerings

Tel Aviv, Israel-based Cybereason was founded in 2012 as an endpoint protection offering by Israeli entrepreneurs Yossi Naar, Yonatan Amit, and Lior Div. Prior to setting up Cybereason, Lior Div led a team within Israel Defense Forces’ Unit 8200, an elite group that specializes in cyber security. Unit 8200 has helped evolve several successful Israeli cyber security startups such as Check Point Software and Palo Alto Networks. Experiences in the army help the founders and employees understand hacking operations.

Israel still has mandatory military service and the cybercrime unit gets top picks among new recruits. While at the Unit, Lior reached the rank of lieutenant and was involved in cracking and reverse-engineering malware and other hacking operations of adversaries. He, and his team of ex-military intelligence agents have redeployed their learnings from the military days to develop enterprise offerings that come with an early-warning system that can visualise, detect, and shut down hacking operations.

Cybereason started with endpoint detection and response, but over the years, it has expanded to other areas. Today, it claims to target and protect it all. It has developed products that work to secure any device that is connected to the Internet – ranging from traditional hardware to wearables to cars and Internet of Things devices. Its AI platform can observe an attack, instantly warn the companies about the attack, and initiate activities to immediately stop the threat. Even if it finds a single component of an attack, it can connect it to other pieces of information to reveal an entire campaign and shut it down.

Besides Israeli military executives, Cybereason has also been leveraging CIA top executives. Recently, it added Robert Bigman, a former top CIA executive, as an Advisory Board member to its leadership team.

Cybereason’s Financials

Cybereason is privately held and extremely secretive about its financial performance. All it discloses is that is has witnessed triple digit growth in recent quarters. It has raised $189 million in funding so far from investors including CRV, Lockheed Martin, SoftBank, and Spark Capital. Its last round of funding was held in June this year when it raised $100 million at a valuation of $1 billion in a round led by SoftBank Group. Cybereason plans to use the new funds to expand its products, hire additional talent, and improve its presence in Boston, Tel Aviv, London, and Tokyo.

Cybereason may have an interesting history and a Unicorn valuation, but given the vast number of vendors that are currently in the cyber security market, it will need to be more than just another name. I won’t be surprised if it gets acquired as part of the consolidation that is due in the industry. Palo Alto Networks, for one, is looking to add to its arsenal. Then, there is always Symantec that is constantly on the lookout for potential targets.