Israeli Cyber Sector Poised for Major Growth, Fueled by AI
Translated & summarized from Calcalist by baba
Ziv Konan, a partner at New Era Venture Capital, predicts that the Israeli cybersecurity sector will produce the next Palo Alto Networks, likely originating from Tel Aviv, driven by AI advancements. He highlights AI's impact on creating new security challenges and accelerating attack and defense speeds. Konan believes new companies have an advantage in adapting to these changes, and that Israeli entrepreneurs, especially those with offensive cyber experience from units like 8200, possess a critical edge in developing innovative solutions.
The story in 6 lines · by baba
- Ziv Konan believes the next Palo Alto Networks will emerge from Israel, likely Tel Aviv.
- AI is fundamentally changing the cybersecurity landscape, creating new challenges and accelerating threats.
- New companies have an advantage in adapting to AI-driven cybersecurity shifts.
- Israeli entrepreneurs, particularly those with offensive cyber experience, hold a key advantage.
- Access to capital is crucial for rapid growth and market penetration in the cyber sector.
- The trend favors companies remaining private longer due to easier access to funding.
Ziv Konan, a partner at New Era Venture Capital, believes the Israeli cybersecurity sector is on the cusp of significant advancements, potentially birthing the next Palo Alto Networks, with Tel Aviv likely being the birthplace. Konan, who previously served in Unit 8200 and holds an MBA from MIT, is a prominent investor in Israel's cyber scene, despite living in Boston. New Era, a relatively small fund, has invested in 40 companies, including two unicorns, and has seen successful exits like the sale of Apono for $250-300 million.
The cybersecurity industry remains robust despite global market volatility and the broader economic impact of the AI revolution. Konan points to three key shifts driven by AI: the emergence of AI agents creating new security challenges, and dramatic increases in both the speed of attacks and the speed at which vulnerabilities can be remediated. However, he notes a gap between identifying threats and effectively closing them, as defenders struggle to keep pace with attackers.
Konan suggests that new companies have an advantage in adapting to this evolving landscape, as established firms may need to cannibalize existing businesses to build new AI-centric platforms. He highlights emerging opportunities in areas like distinguishing AI agent actions from human ones, managing data leaks, and the shift towards continuous penetration testing instead of periodic checks.
Regarding venture capital, Konan explains that New Era's strength lies in its deep network and ability to identify promising entrepreneurs early, often through military connections, giving them an edge over larger, later-stage funds. He also emphasizes the unique advantage Israeli entrepreneurs, particularly those from Unit 8200, bring due to their offensive cyber experience, which is crucial for developing effective defensive products.
Konan acknowledges that while technology is vital, access to capital plays a significant role in a company's success, enabling faster growth and market penetration. He also notes the trend of companies remaining private longer due to easier access to private funding, though building a platform company like Palo Alto Networks still requires long-term vision and potentially a public offering.