Israeli cyber sector exports soar to $3 billion in 2014

cyber security

The Israel Export Institute estimates that the revenue of nearly 250 Israeli firms in the sector will increase at a rate of 10% per year.

Israel sold some $2.5 billion of cyber technology to the US in 2014, according to the Israel Export & International Cooperation Institute (IEI), which claimed the 'startup nation' totaled $3 billion in cyber exports for the past year.

The institute estimates that the revenue of nearly 250 Israeli firms in the sector will increase at a rate of 10% per year with their primary target still the US. "Most of the Israeli companies working in the cyber sector aim for the American market because it is the most active and has the highest demand for systems in this field," said Deputy Director-General Lior Konitzki of IEI's Technology Industries Division to "Globes".

"The majority of the sales in the sector are among the leading Israeli firms, those considered giants in their field, like Check Point Software Technologies Ltd. (Nasdaq: CHKP) , Radware Ltd. (Nasdaq: RDWR), Imperva, and CyberArk Software Inc.(Nasdaq:CYBR). Additionally, the well-known defense firms, like Israel Aerospace Industries Ltd. (TASE: ARSP.B1), Rafael Advanced Defense Systems Ltd., and Elbit, have joined the bandwagon," he explained.

"These companies invest more and more resources towards the cyber sector. And, unlike the export figures from traditional industry sources, the cyber sector is far more difficult to track," he added.

Some of the figures on the scale of the Israeli industry in the cyber sector were prepared for a conference hosted by the IEI on Wednesday, in an attempt to expose local companies working in cyber to the fast-growing US market.

Last year, 30 Israeli cyber firms raised some $200 million nearly 50% more than in 2013. The IEI reported that in the first quarter of this year, some 10 companies received investments totaling more than $90 million 40% more than in the respective quarter of the previous year.

According to estimates, there are between 250 and 300 Israeli firms in the sector, while more than 25 international corporations operate within Israel.

In 2014, eight Israeli companies were bought out for $700 million; in the first quarter of 2015, six firms were acquired for a sum of nearly $300 million.

Last year, two Israeli firms CyberArk and Varonis started trading on the NASDAQ, raising $200 million and selling shares worth some $2 billion. The IEI estimates that the total value of the cyber firms currently trading in the US is approximately $20 billion.

The head of the cyber branch at IEI, Ahiad Alter, said on Wednesday that "according to some of the forecasts up to 2020, some 75% of the largest companies in the US will allocate significant funds from their budgets over the next two years to locate cyber threats and incorporate a variety of means to deal with them"

He emphasized that "for American companies and organizations, the cyber threat is at the top of the agenda, and thus the Israeli firms in the field spend significant efforts to learn how to properly integrate into this market while maximizing their potential business."

Among the attendees of the conference which the IEI hosted were founder and executive of Palo Alto Networks, Nir Zuk, as well as the founder and former CEO of Trusteer, Micky Boodaei.

The pair tried to expose the representatives of various Israeli firms to proper approaches and marketing for products in the American market: "The world recognizes Israel's potential in the cyber sector and this in part because of the threat it is under it is a public secret that Israel is the country most challenged by cyber attacks; out of these challenges, we breed many solutions here," added Konitzki.

Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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