Sirin Labs raises $72m for secure smartphone

Moshe Hogeg and Kenges Rakishev

The Israeli startup will offer a military-grade mobile security phone for NIS 50,000 from next month.

An Israeli startup is hoping to allay the worries of global elites with a new secure smartphone. Sirin Labs, which has been in stealth mode for the past three years, has closed a $72 million seed round.

The company, co-founded by Moshe Hogeg, actually completed a $47 million financing round recently, but the total also accounts for $25 million it raised from its founders before its incorporation in 2013 but did not officially report.

Sirin's two other founders are Tal Cohen - who serves as CEO - and Kazakh investor Kenges Rakishev - who serves as president. Singulariteam is the principal investor in Sirin; it was joined in the current round by Chinese firm RenRen. The size of the seed round suggests the company is already valued - on paper - at a few hundred million dollars

Sirin was founded some two and a half years ago. The company has developed a luxury, smartphone - with a price tag between NIS 40,000-50,000 - with top-shelf military grade security. The device will also charge rapidly (30 seconds for a full charge) but its price is primarily driven by its high-end security system.

The company will launch the device, and its flagship store in London, next month at a special event in the British capital.

"Our journey began back in 2013 when Rakishev's phone was hacked," said Sirin in its announcement. "As a successful businessman with important information saved on his smartphone, the breach made Rakishev reconsider his use of mobile technology. He called Hogeg and asked why he could not find a smartphone secure enough to meet the needs of an international businessman."

The pair teamed up with Cohen to found Sirin Labs in Switzerland, "The country with strongest privacy protections in the world," according to the announcement, which also explained the company was named after a mythological creature known for its speed. Legend claims Sirin was only heard or seen by few people and prophesized a better future.

First stop -- London

The company said the British market was its "natural home."

"London is the first station because it is a global financial center," Hogeg told "Globes".

"You have Tokyo, New York, and London, with the last also being a geographic center. London attracts our target consumer from all over the world, but we won't be stopping there!"

How much will the device cost?

"It will not be the most expensive device available. It will be more affordable than other luxury phones which place an emphasis on style -- say, devices covered in diamonds. Estimates of a cost between NIS 40,000-50,000 are not unrealistic."

Tell us what sets you apart.

"It's quite simple: companies like Apple or Samsung have a mass market approach which is dictated by price. The entire commercialization process is focused on lowering its price for the market. But in our case, our first job is to assure the technical specifications are top-notch. In every parameter, the smartphone has the most advanced specifications in the world -- which makes it expensive.

"Secondly, the security and encryption levels on the device integrate Israeli and American technologies, both software and hardware. It will be the most secure consumer device in the world. Its security level will be close to what is acceptable in the defense establishment -- all without taking away from the user experience."

Its price tag means it will only be available to a wealthy few. Is that a large enough market segment?

"Large enough for us. Several studies show there are 18 million millionaires globally, which is to say people with at least one million dollar of liquid assets. Furthermore, there are 40 million people who do not fit that definition but are considered "high end" consumers -- they basically act like millionaires. Overall, it's a market segment of almost 60 million people that is completely untapped.

"I would be satisfied selling a few tens of thousands of devices. I don't need to sell millions, meaning it's a large enough segment for a small outfit like ours -- but not for a large or massive one like Apple and Samsung. It's a niche segment."

Two R&D centers

Hogeg further stressed, "In each consumer category, there are products targeting mid-market, mass market, and high end market. Only the technology world lacks these segments, and that is why we founded Sirin. We are not driven by the price. I wish we could sell more affordable devices but unfortunately we cannot."

The company has two R&D centers: the Tel Aviv base houses cybersecurity and IT security experts while the Swedish office hosts telecom experts, designers, and engineers. Sirin employs 85 people in total, with close to 60 based in Israel.

"We will hire more workers in Israel; in a few months we will number 100," promised Hogeg.

In the announcement, CEO Cohen said: Unlike mainstream technology companies where price is paramount, Sirin Labs doesnt need to wait a couple of years before bringing the most advanced technology to its customers. We can offer them tomorrows technology, today. Cost doesnt influence our decision-making; optimal functionality and quality do."

Published by Globes [online], Israel business news - www.globes-online.com - on April 25, 2016

Copyright of Globes Publisher Itonut (1983) Ltd. 2016

 
Moshe Hogeg and Kenges Rakishev
Moshe Hogeg and Kenges Rakishev
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