Israeli Cyber Startup Minimus Shuts Down, Returns $10 Million to Investors

Israeli entrepreneurs Ben Bernstein, Dima Stopel, and John Morello, who previously sold their company Twistlock to Palo Alto Networks for $410 million, launched a new cybersecurity startup called Gutsy (later renamed Minimus). Four years ago, they raised $51 million in a seed funding round led by YL Ventures and including notable investors such as founders of Waze, Talon, former CyberArk CEO Udi Mokady, and CrowdStrike CEO George Kurtz. Despite this significant backing, Minimus struggled to gain market traction after shifting its product focus and downsizing its team by over ten employees.

Minimus developed a software development environment based on containers, designed to provide a secure, isolated platform that reduces developers’ exposure to cybersecurity vulnerabilities in code libraries and development servers. This approach contrasted with traditional methods that scan pre-built software. However, the company faced stiff competition from Chainguard, a dominant player founded by former Google employees, which has raised nearly $900 million and is valued at $5.4 billion.

After months of searching for a buyer for the company or its team without success, the founders decided to close Minimus and return approximately $10 million in remaining funds to investors, including YL Ventures and the American Mayfield Fund. CEO Ben Bernstein stated, "After a strategic process that did not mature, we decided to close Minimus in an orderly manner. This is not the outcome we hoped for, but I am proud of the team and what we built together, and grateful to our customers and investors for their trust and partnership." The closure was announced to about 35 employees on Sunday, marking a rare case of an Israeli startup returning capital rather than continuing to operate until funds are depleted.