Spotlight on Cyber: Resiliency, Consolidation and a Unicorn Sighting

Cybercrime will cost the global economy more than $20T by 2026, a 1.5x increase compared to 2022, as organizations prioritize proactive and preventative cybersecurity initiatives. For organizations, resiliency continues to be a key priority in 2024, further highlighted by the recent large-scale outage caused by a Crowdstrike error. This month’s Compass highlights recent cyber industry news and developments, as well as career opportunities contributing to innovation in this critical technology sector. 

2024 Developments in Cybersecurity 

Our colleague Pramod Gosavi dives into trends and takeaways from BlackHat in this new post. Here is a preview of some of the trends spotted at this recent industry gathering: 

1. Application Security, Supply Chain Security, Applications Security Posture Management (ASPM) categories have merged: The landscape of application security, supply chain security, and Application Security Posture Management (ASPM) is evolving as automation in ASPM takes center stage. Vendors are increasingly consolidating various features onto single platforms, even though many initially specialized in point solutions for scanning, ASPM, or CI/CD governance.
2. Consolidation: Consolidation remains a prominent theme, with growth-stage vendors expanding their core platforms to integrate additional functionalities and drive revenue.
3. Identity: Identity remains a critical focus, given that most breaches originate from identity-related issues. Consequently, vendors are incorporating identity aspects into their detection and response strategies, whether through Data Security Posture Management (DSPM), Data Access Governance, or Cloud Detection & Response (CDR). Notably, Zero Trust messaging was less emphasized this year.

Cybersecurity Heats Up Globally  

Crunchbase News’ Chris Metinko recently reported that global venture funding to cybersecurity startups had its best quarter since Q1 2022, increasing 144% YoY to $4.4B. The timely need for innovation in cyber was clear at industry gatherings around the world over the past few months: 

📍 Las Vegas

BlackHat USA 2024: Consolidation, AI, Identity & Takeaways for Cybersecurity Founders

Do you agree that BlackHat is a better conference than RSA in terms of attendance of potential customers? Read our colleague Pramod Gosavi 's take from the expo floor in this new post on cyber trends and takeaways for founders.  

A sneak peek at the key takeaways:

• Automation is becoming table stakes. Almost every tool is providing an option of automation for remediating findings, alerts, violations, etc.
• The recent mishap by Crowdstrike can be used to your advantage to persuade customers to not buy from large platform vendors particularly if the new tool is not a natural extension of an existing platform.

On stage, Deep Instinct CIO Carl Froggett addressed prevention-first strategies in the age of Edge AI and the urgent need for prevention-focused approaches to safeguard against evolving cyber threats. Learn more on the Deep Instinct blog: "Hacker Summer Camp" Recap: Black Hat, DEF CON, and the Growing AI Arms Race 

📍 San Francisco

AppSec & Security Leaders Connect

Earlier this year, we welcomed the cybersecurity community to San Francisco and the Blumberg Capital SF office during RSA. With portfolio companies Myrror Security , Deep Instinct , Hunters , and BioCatch in attendance, we got an up-close look at trends in product development and how CISOs are prioritizing new cyber solutions.

📍 Tel Aviv

Cyber and AI innovation are front and center

Cyber was up front and center during Tel Aviv University’s Innovation Week. Our colleague Yodfat Harel Buchris spoke to Moshe Bellows , managing principal at Maccabee Ventures , about the changing landscape of startup investing, specifically in cyber and AI. 

Cybertech's 10th Anniversary

Also in Tel Aviv, Cybertech ’s 10th anniversary brought together the global cybersecurity community for discussion, education and collaboration. Financial institutions are top targets of cyber attacks, with breaches in financial services among the most costly compared to other sectors. Our colleague Yodfat Harel Buchris led a discussion on this topic with Discount Bank בנק דיסקונט ’s Hadar Michaelis , Myrror Security CEO Yoad Fekete , and Richard Rugira of National Bank of Rwanda (NBR) .

In a closed-door startup and investor session, David Blumberg joined Dadi David Gertler of the Israeli National Cyber Directorate and Discount Tech's Guy Navon, PhD for a conversation on cyber investments in light of generative AI, geo-conflicts and current financial markets.

Next up: 

Will we see you at Cybertech NYC on Sept. 5 or OWASP® Foundation in San Francisco on Sept. 23-27?

Cyber Portfolio Spotlight: BioCatch

It’s been an eventful year for portfolio company BioCatch . The Israeli-founded fraud detection company led by Gadi Mazor earned its unicorn status in late 2023. Blumberg Capital first invested in BioCatch in 2014, leading the company’s Series A. Permira recently announced it would acquire a majority stake in BioCatch. As a result of the news, CTech by Calcalist named the deal in their list of the five biggest M&A deals of Israeli companies in 2024. 

• BioCatch Becomes a Unicorn 
• Permira to Acquire Majority Position in BioCatch at $1.3B Valuation 
• Top 5 biggest M&As of Israeli companies in 2024 

Team Spotlight: Lior Carmel

Our team welcomes back Lior Carmel as a vice president based in New York. Prior to completing his MBA at Harvard Business School, Lior was based in Blumberg Capital’s Tel Aviv office, investing in cybersecurity, AI, data infrastructure, and dev tools. 

Previously, Lior was a technology scout and innovation consultant at Deloitte , where he led Deloitte Israel’s engagements with the Israeli cybersecurity ecosystem. He began his career in the Israeli Intelligence Corps in unit 8200, serving as an officer for six years and fulfilling multiple roles in product and project management across cybersecurity, big data, and telecommunications.

Welcome back to the team! Connect with ➡️ Lior Carmel

Careers in the Blumberg Capital Cybersecurity Community

Multiple of our cybersecurity portfolio companies are hiring. Take a look at the sampling below or check out our careers page!

• Threat Analyst, Myrror Security 
• AQ Automation Engineer, BioCatch 
• Security Researcher, Hunters 
• Threat Intelligence Researcher, DeepInstinct 

Interested in learning more about a different investment vertical? Let us know in the comments!