In the wake of Israeli cyber security company SentinelOne's impressive $70 million Series C financing round announced yeaterday, "Globes" spoke to founders CEO Tomer Weingarten and CTO Almog Cohen.
"Our level of security is still low with respect to the ability of traditional anti-virus products to handle any but the most routine daily threat. In effect, anti-virus solution providers are also adopting the approach of scanning files or indicators based on machine learning and artificial intelligence in a very narrow way for very broad problems," says Weingarten. "It's time to go far beyond the anti-virus products and standard solutions currently in the market by adopting an end-points platform that is comprehensive, automated, and adapted to advanced attacks, and has been tested and proven to be extremely effective even against the most sophisticated cyber threats."
Cohen backs up Weingarten, saying, "The current financing round is an important step on the way to realizing our vision of bringing about the first revolution in the end-points and servers security market in four decades with a new generation of products based on next-generation technology that will end the hegemony of the existing security products."
"Globes": Explain how SentinelOne is different from other cyber security companies. There are many companies and many technologies, and it seems to me that not many people are able to tell them apart.
Cohen: "That's true. There's a lot of buzz in our industry. Many people are saying the same thing, and it's very difficult to distinguish between companies and technologies. I'll try to bring a little order into the chaos: there are traditional solutions, such as anti-virus solutions that we all know from Grandma's computer like those of Symantec and McAfee that have been in the market for 40 years already, and they have an anti-virus solution based on static signatures. Static signatures mean that their product has a list of security breaches, and when someone tries to run malware on the computer, their solution checks whether it's good or bad according to the list. This is old world technology, and virus writers have already learned to evade this list. For them, the problem has already been solved. In recent years, a new generation of anti-virus companies has emerged that does not use static signatures. There now five companies, including us, that say they can replace anti-virus, and have regulatory approval for it. These companies are leading the next generation of anti-virus solutions.
"The end-point anti-virus market (meaning each one of our computers, T.T.) is a very competitive and saturated market. Our solution doesn't complement existing anti-virus solutions; it replaces them. The technology developed by SentinelOne belongs to the new generation of malware detection technologies. In contrast to the current generation of (anti-virus) products, which detect malware according to characteristics set in advance, SentinelOne's technology is able to detect suspicious behavior dynamically by analyzing the behavior of end points and responding in real time. Another significant advantage is the ability to respond to different types of threats within a short time, without depending on whether the threat penetrated through a document, Internet surfing, an image, etc."
You say that you will lead the first revolution in four decades. Isn't that a little arrogance on your part to challenge the dominance of companies like Symantec?
"Maybe, but we mean it, and we're not the ones who invented an alternative solution to anti-virus. The anti-virus solutions market is a huge market that doesn't change much. It has been clear for a long time that anti-virus is ineffective, but it takes time for this market to assimilate changes. The market realized it by itself a long time ago, and not because of us. The revolution began when malware producers succeeded in systematically overcoming the existing (anti-virus) solutions, which have lost their effectiveness. Concerns in the market, especially the large organizations, have lost confidence in the existing solutions, but without any real alternative, have had to search for complementary products in order to restore the effectiveness of their defense system. There is now a proven alternative that is a proper substitute and makes it unnecessary to use a range of products in order to achieve one purpose - protecting the endpoints and servers in an enterprise against hostile penetration. I can also tell you that we have reached the market at the right time with very mature and effective technology. So maybe what I'm saying is a little grandiose, but we are trying to lead this change."
Cohen emphasizes that he and his partner in founding the company want to build a large company. "After this C round, it's clear that we're on the way to doing something big. We've had opportunities for an exit on the way, and we refused. The company has a few hundreds customers right now, who are installing the company's solution in hundreds of thousands of endpoints. This number is likely to reach a million during the coming year. What is significant is not the number of endpoints, but revenue, and we plan to quintuple it to tens of millions of dollars this year."
From what you experienced during the financing round, are venture capital funds cutting back on investments in cyber security companies?
"There are highs and lows, but not in the cyber security market. A large window for investment in cyber security has been opened in recent years, and a lot of companies have raised money. Now the pendulum is swinging towards consolidation, and that means investing in technologies that are really special, not niche technologies."
Weingarten and Cohen have been friends since second grade. "We grew up together, and we have excellent chemistry. We've been through various ventures, both together and individually, but SentinelOne is our first serious company," Cohen says. Cohen worked at Check Point Software Technologies Ltd. (Nasdaq: CHKP) for seven years, while Weingarten worked at Israeli company Toluna, among other places. "Neither of us have higher education," Cohen admits. "We skipped it. We felt we didn't need it," he says, emphasizing that the company selects employees according to their experience, not their academic education.
One of the new investments in Weingarten and Cohen's company is by Sound Ventures, a venture capital fund owned by movie actor Ashton Kutcher and former talent manager Guy Oseary, an Israeli. It is well-known that Kutcher is not only a movie actor, the ex-husband of Demi Moore, and the portrayer of the character of Michael Kelso in "That '70s Show." Seven years ago, he joined Oseary, the musical manager of Madonna and U2, and they jointly turned $30 million into an investment portfolio worth $250 million, almost nine times as much, according to an estimate by "Forbes" magazine a year ago. This portfolio includes companies like Uber and Airbnb. For example, the pair's $500,000 investment in Uber is now worth 100 times as much, according to "Forbes." Incidentally, Kutcher was featured last year on the cover of "Forbes" as part of its annual Midas rating of successful venture capital investors.
Cohen says that Kutcher dropped in to visit the SentinelOne offices in Palo Alto, California as part of his investment in the company. "He's a relatively small investor. Surprisingly, he thinks like a businessman, and has a well-developed sense of entrepreneurship. He understands things. It's pretty far from his image," Cohen says, but stresses that Kutcher and Oseary's fund makes small investments of a few million dollars. "In the case of SentinelOne, Kutcher's investment is important for the company's branding among endpoint users."
Published by Globes [online], Israel Business News - www.globes-online.com - on January 26, 2017
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