Israeli data driven cybersecurity company Sayata Labs today announced that it had completed a $6.5 million financing round led by RDC, a company jointly owned by Electronic Industries (TASE: ELRN) and Rafael Advanced Defense Systems. RDC specializes in early-stage venture capital investments. Other participants in the financing round preferred to remain anonymous. Sayata Labs' platform analyzes cybersecurity risks for small and medium-sized companies.
CEO Asaf Lifshitz, VP products Iddan Golomb, and CTO Avishay Maya, three graduates of the IDF Talpiot program, founded Sayata Labs in 2016. The company has avoided the limelight until now. It has 10 employees in its Tel Aviv offices, and plans to open another office in the US, following the financing round, in addition to hiring additional employees for both offices.
The cyber insurance sector offers insurance and indemnifies policyholders for cyber break-ins of their computer networks. The sector is a new and rapidly growing insurance branch, which Sayata Labs says is growing at 30% a year. Annual worldwide premiums in the sector total $5 billion. Sayata Labs is developing a solution designed to improve the insurers' ability to understand the risks to which they are exposed and the ability of insurance agents to assess the risks of the company insured by them.
Sayata Labs accomplishes this purpose by analyzing a range of information sources, based on past break-ins and insurance claims. It searches for the causes of the break-ins, which are analyzed by algorithms developed by the company. It uses these analyses to provide insights and policy recommendations for avoiding similar attacks. Sayata takes pride in being the only company offering a solution of this type for small and medium-sized businesses.
The difference between cyber insurance for small companies and such insurance for large companies is mainly the budget that the insurance companies can spend on analyzing the risk and setting the premium. A larger company pays more and can be examined in more depth. When small companies are involved, it is not worthwhile for insurance companies to invest large amounts in the process of assessing the risk, because the customer himself is small.
Furthermore, the cyber threats are also different for large and small companies. Serious cyber threats developed especially for breaking into a large company are more likely. Attacks against smaller companies are simpler and not directed at a specific target, but the defensive tools possessed by small companies themselves are also simpler.
Together with the financing round, Sayata Labs also announced a cooperative venture with the world's largest insurance company - AXA, which has 171,000 employees worldwide and 105 million customers in 65 countries. AXA made a €6.2 billion profit on €103 billion in revenue in 2018, and managed €1.4 trillion in assets as of the end of 2018. Sayata Labs is not disclosing the business model behind its cooperation or its extent.
Following the financing round, RDC VP cyber investments Zohar Rosenberg said, "Currently, insurers are underwriting these policies with little visibility or insight into the risk. Sayata is changing this reality by simultaneously raising the overall cyber security standard for SMBs and insurers by providing both parties with a far greater understanding of cyber security posture. This enables both insurers and insureds to significantly reduce their risk. As a cyber security focused investor, Sayata is the best solution we have seen for the fast-growing cyber insurance industry."
Founded: 2016
Founders: CEO Asaf Lifshitz, CTO Avishay Maya, VP products Iddan Golomb
Employees: 10 in the company's Tel Aviv offices
Capital raised: $6.5 million
Prominent investors: RDC, a company jointly owned by Elron and Rafael
Published by Globes, Israel business news - en.globes.co.il - on March 26, 2019
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