Yossi Cohen leads Softbank investment in cyber co Claroty

Former Mossad chief Yossi Cohen  credit: Ronen Zvulun, Reuters
Former Mossad chief Yossi Cohen credit: Ronen Zvulun, Reuters

Claroty will use the $400 million from Softbank and existing investors to take over Medigate, creating a market leader in cybersecurity for industry and hospitals.

Five months after joining Softbank, and about six months after stepping down as head of the Mossad, Yossi Cohen is making a first investment in an Israeli cybersecurity company. Cohen's position at Softbank was first reported by "Globes". Appropriately for someone with considerable experience in organizing cyberattacks on sensitive installations, according to foreign sources, Cohen is leading an investment in a merger between two Israeli companies each of which has become a market leader in its field: Claroty, which dominates the market for cybersecurity solutions for industry, and Medigate, which provides a similar solution to hospitals in the US.

In the deal, Softbank's Vision 2 Fund will lead an investment of $400 million, alongside existing investors such as Schneider Electric, Bessemer, Temasek, and Team8, in Claroty, which will take over Medigate in a cash and shares deal, creating a corporation with a value estimated at $2-2.5 billion, generating revenue of over $90 million annually, and employing 420 people. Through the fund-raising round and the merger, Claroty becomes the market leader in security for infrastructures and low-tech devices hooked up to the web, competing with Israeli company Armis and with Microsoft and F5, each of which has bought other Israeli companies, such as CyberX and Indegy.

If all goes well, and the merger is completed successfully, the company manages to double its annual sales to the region of $200 million, and about 100 more people are recruited, it is expected to be floated on one of the stock exchanges in New York within two years. Claroty thus aims to be the biggest listed company in cybersecurity for installations, as Check Point and Palo Alto lead security for enterprise networks and SentinelOne leads endpoint security.

Claroty, which has been ranked among "Globes'" Most Promising Startups", has developed technology that identifies all the devices and machines in industrial plants and infrastructure installations, whether these are command and control systems in nuclear power plants, robots in car factories, or drug packing machines in pharmaceuticals factories. The company's solutions secure online devices in all Pfizer's plants, including those that produce vaccines against Covid 19, in BMW's factories, and in factories of Siemens and Schneider, which are also strategic partners and investors in the company.

Claroty's secret begins with effective mapping of all the devices in an enterprise: smartphones and servers, but also low-tech systems, such as turbines, command and control equipment, cameras and sensors.

"Giant companies, among the biggest brands you can think of, are not aware of all the devices connected to their networks," Claroty CEO Yaniv Vardi told "Globes". "Sometimes it reaches a level of lack of awareness of half the devices." Claroty's system maps the connected devices, identifies risks, weaknesses and threats, and secures access to the system.

Published by Globes, Israel business news - en.globes.co.il - on December 8, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Former Mossad chief Yossi Cohen  credit: Ronen Zvulun, Reuters
Former Mossad chief Yossi Cohen credit: Ronen Zvulun, Reuters
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