Sources inform “Globes” that Israeli start-up Meganet is currently raising $10 million. Meganet is developing a Virtual Matrix Encryption (VME) system.
Office manager of Meganet's Israeli branch Ronen Zour said that Menorah Gaon investment house was leading the investment. Zour expects the company value for the round at $60 million, after money. However, potential investors in the company told "Globes" they estimate the company value at $40 million, after money.
Meganet was founded by founded president and CEO Saul Backal in 1997. The company has since raised $8 million from private investors. The company’s sales to date amount to $3 million, and expects this year's sales to reach $8 million.
Fomer IDF Northern command OC and deputy Mossad director Major General (res.) Amiram Levin recently joined the company as VP strategic planning.
As a test, Meganet has offered a prize of $1,048,576 to any hacker who can break its encryption, the amount equaling the number of bytes the code consists of. To date, none of the 80,000 hackers who have tried to break the code has succeeded.
Meganet is opening two new offices, in Washington DC and Las Vegas, which will focus on marketing and sales to the US Department of Defense and other government offices. The company has a branch in Israel and two in the US, in New York and Los Angeles, and will soon open another in Oregon.
Despite increasing the number of its offices, the company has cut its staff from 44 to 35, after outsourcing its marketing.
Backal said that Meganet will increase its staff in Israel over the coming year from six to 20, if the company's plans to set up a facility in Ashkelon are realized. The company's offices in Israel are located in the Azrieli Center in Tel Aviv.
Published by Israel's Business Arena on 2 September 2001