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Cyberstarts, which started in 2018 and is backed by Sequoia
Capital and other investors, said it has invested in some nine
cyber startups in its initial $54 million seed fund and six more
companies in a subsequent $100 million seed fund.
The new "opportunity" fund would invest up to $15 million per
round in companies in its seed funds for Series A and B funding
rounds, Cyberstarts founder Gili Raanan told Reuters.
The growth of cyber companies, he added, has come as the amount
of threats have risen - from Bitcoin to cloud to self driving
cars. "With every new business or new technology there is a need
for a new type of security solution," Raanan said.
"We are likely to invest in around 12 to 14 companies," said
Raanan, also a partner at Sequoia. "We have already have
identified follow-on investments for two companies in our
portfolio, so we will start to deploy money right away."
He noted that Cyberstarts would likely launch a third seed fund
of $50-$60 million by the end of 2022 to meet growing demand for
investments in cyber firms.
Over the past decade, as many 100 cyber Israeli security firms
were funded each year, Raanan said. "It's a staggering number.
It means that in the next 10 years, you will have 1,000 new
cyber security companies."
In Israel, there are about 450 active cyber firms, compared with
a 1,000 in the United States and 200 in Europe, he said.
Cyberstarts cited outside research saying its first $50 million
fund is now valued at $1 billion, with returns averaging 300% a
year the last four years, In 2021, its portfolio companies
raised $1.3 billion for a combined valuation of $20 billion.
(Reporting by Steven Scheer; Editing by James Mackenzie and
Tomasz Janowski)
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