Israel’s Cyber Industry Growing Exponentially, Report Shows

By: TPS Staff

The cybersecurity industry as rapidly developing, and Israel is solidifying its status as a leading force in the industry, according to a new report by Israel’s Cyber Directorate.

The report released Monday on the current status of the cyber industry in Israel and covering the years 2013-18 showed that at the end of 2018 Israel had 421 active companies and another 118 which have been acquired by foreign companies.

Of the newly established companies in the last decade, 367 new companies joined the Israeli pool of cyber companies between 2013 and 2018, with most of them still active. These new companies, accounting for nearly 49% of the total of cyber companies, emphasize the change in the industry during recent years.

Data protection, with a 15% share, reflects the knowledge brought to the cyber sector by veterans of the IDF’s tech units, which is then leveraged to a large part of the activity in the Israeli cyber field.

Another sector that also taps into knowledge acquired by Israelis during their military service is cyber intelligence, with 7% of the total, a much higher percentage than in other countries.

At the end of 2018, the cyber industry in Israel was estimated to have approximately 20,500 workers, half of whom work for private companies and start-ups.

Capital raising activity in the cybersecurity realm increased significantly in the past five years. The total sum of funding was $3.9 billion since 2013, with 501 funding rounds.

The total revenue of private companies in the Israeli cyber market is estimated to be between $500–600 million for 2017–2018.

Total revenue of public Israeli companies that operate in the cyber industry was close to $3 billion in 2017.

Estimated export activity in the Israeli cyber industry is between $5.5–$6 billion in 2017 and takes into consideration four groups of companies: public companies, Israeli cyber-related companies, foreign cyber R&D centers, and private companies.

Overall, the value to Israel’s GDP from Israeli employees at foreign cyber R&D centers is assessed at approximately $0.9 billion during 2017.

The overall amount from sales was between $500–550 million in 2017.

Israeli activity accounted for 18% of network security spending in the US, 34.5% of the data security spending, and 4.3% of identity access management spending.

Israel is considered a global leader in the cybersecurity business, and approximately 25 percent of all global investments in cybersecurity go to Israel.

Israel signed the second-largest number of cybersecurity deals internationally, according to a report by New York data firm CB Insights published in April 2018. The US came first.

Israel came in second place with 7 percent, ahead of the United Kingdom with 6 percent, Canada with 3 percent and China with 2 percent, according to the report.

Israel has developed advanced security protocols, as cyber-attacks on Israel have risen exponentially in the past several years, reaching up to two million attacks against crucial Israeli infrastructure on a daily basis.

Israel’s rise as one of the world’s leaders in cybersecurity has been boosted by cooperation between the military, government, education and private sectors, a level of partnership unmatched in the Western world.

(TPS)