PayPal confirms CyActive acquisition

CyActive

PayPal will open a second Israeli development center in Beersheva, based on cyber security company CyActive's offices.

Six days after an exclusive report in "Globes," online payment giant PayPal officially announced its acquisition of Beersheva start-up CyActive. The acquisition price was not announced, but was estimated today at $60 million. Final closing of the deal is slated for next quarter, following which PayPal will establish a second development center in Beersheva based on CyActive's offices. PayPal released no further details, but it is believed that the center, which will develop technologies to locate and identify malware, will have 20 employees.

PayPal CTO and SVP James Barrese said, "This new security center will allow us to tap into the country’s cutting-edge technology and top cybersecurity talent. Our goal is to extend our global security leadership, and bolster our efforts in predictive threat detection and prevention."

Founded in 2003 by CEO Liran Tancman and CTO Shlomi Boutnaru, CyActive has raised $2 million from German company Siemens, venture capital fund Jerusalem Venture Partners (JVP), and an additional foreign investor.

CyActive is part of JVP's cyber incubator in Beersheva, set up 18 months ago as part of the Beer Sheva Advanced Technologies Park. This is the first exit for the young incubator, which is run by JVP partners Yoav Tzruya and Dr. Nimrod Kozlovski. For JVP, this is a further success in cyber, after the flotation in the US six months ago of CyberArk Software Inc.(Nasdaq:CYBR), in which JVP was the main shareholder (45% before the flotation). CyberArk currently has a market cap of $1.8 billion.

CyActive has developed an algorithm inspired by biology, which is Tancman's field. Boutnaru formerly managed the cyber center of excellence at Matrix IT Ltd. (TASE:MTRX). CyActive describes itself as a predictive cyber security company, capable of foreseeing and forestalling potential cyber threats to a customer.

PayPal chief information security officer John Nai said that his company's most important function was to guard the money of millions of its customers all over the world. He added that his company was focusing most of its efforts on finding ways to make its systems safer by developing the most advanced technologies. He explained that PayPal's new center and the acquisition of CyActive would enable his company to offer its customers even better ways of protecting them.

This is PayPal's second acquisition in Israel, after it bought FraudSciences, whose field is monitoring financial fraud, in 2008 for $169 million. PayPal established its fraud control center in the Electra Tower in Tel Aviv on the basis of this acquisition, and later also developed the marketing and sale in Israel of its leading global online payment business. PayPal is a subsidiary of eBay, which also has a substantial presence in Israel.

Published by Globes [online], Israel business news - www.globes-online.com - on March 10, 2015

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

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