Jerusalem Venture Partners has opened the first-of-a-kind Cyber Labs startup incubator, part of Israel's drive to be a global cybersecurity leader.
It seems like everybody and his cousin is talking about cybersecurity in Israeli tech these days, and that includes the government of Benjamin Netanyahu. More importantly, interesting things are starting to happen, and there's a foundation in technology and innovation in Israel to support it.
Case in point: At the beginning of 2014, Jerusalem Venture Partners (JVP), a major investor in Israeli technology companies, launched the Cyber Labs incubator in partnership with Ben-Gurion University (BGU) in the city of Beer-Sheva in the south of Israel.
Located in the newly-opened Advanced Technologies Park next to the BGU campus, Cyber Labs is the first cybersecurity startup incubator under the Israeli Office of the Chief Scientist's incubator program. The government incubator program required that JVP bid on the project with a fully-developed business plan and proposal.
"Hi-tech is the engine of the Israeli economy, and it's important that we bring it to areas and population groups throughout the country," said JVP Founder and Former Chairman Erel Margalit in the BGU press release. "Israel's leadership in the area of cybersecurity is a strategic asset for the country."
Founded in 1993, Israeli venture capital firm JVP has raised close to $1 billion across nine funds and invests in companies working in cybersecurity, digital media, and storage. JVP has led 26 of the largest firm exits in Israel, and opened its first incubator in 2003, the JVP Media Labs in Jerusalem.
JVP Cyber Labs is an "early stage investment vehicle aimed at identifying, nurturing and building the next wave of cyber-security and big data companies to emerge from Israel," and is focused on "cyber-security, enterprise security and data protection."
The incubator is currently looking for companies working on advanced persistent threat (APT) detection and prevention, mobile/BYOD, cloud and database security, identification, M2M, big data analytics, and end-point security. In addition, Cyber Labs is located close to the brand new high tech Telecommunications Division of the Israeli Defense Forces (IDF).
In a telephone interview with TechRepublic, JVP General Partner Gadi Tirosh explained how their success with the Media Labs incubator helped them get started in Beer-Sheva. Thanks to JVP's results, they started receiving offers from around the world to reproduce the Media Labs model in other countries.
"When we started to discuss it," said Tirosh, "we realized it's not about putting our logo on a building in a different country — it is to make another location as successful as the one we have in Jerusalem. We have to be there to contribute our time and our involvement."
"And from all the cities we could have picked from, Barcelona, New York, Prague, New Delhi, and so on, we decided to pick Beer-Sheva," added Tirosh.
"We knew that we could actually create and provide value in Beer-Sheva," said Tirosh. "The elements of that were of course the very strong research in computer science and cybersecurity at BGU, and the future move of the technology units of the military to Beer-Sheva."
Tirosh explained what role military expertise played in JVP's decision. "A lot of the high-tech industry in Israel is a result of veterans of IDF technology units. Since many of those veterans were the talent for the most promising startups in southern Israel, we definitely realized that by moving to the south to Beer-Sheva, we could lead that scene in that place."
"Our model calls for the creation of three to four companies every year at the Cyber Labs," said Tirosh. "We have been experiencing a pretty good success rate from our incubators in the past, about 50 percent, which is very good for incubators. Three years from now, I would expect to see anywhere between 10 to 15 companies at Cyber Labs."
Three months ago, JVP made its first investment in a firm located at Cyber Labs: CyActive, a predictive cybersecurity company that Tirosh said gained lots of attention at the recent CyberTech 2014 conference in Tel Aviv.
"They're doing something quite interesting," said Tirosh. "They realized that 94% of all known viruses and malware are actually combinations of old viruses. So imagine that you could have run genetic algorithms to take an existing virus, automatically make it reproduce, and create all those strains that can be mutated from that virus."
"And then after you did that," added Tirosh, "in a matter of hours and millions of created strains you actually automatically train a detector to detect the common grounds for all those strains. So in fact what you've created here is something that cannot only predict the next attack, but also automatically comes up with a cure for future attacks."
What convinced JVP to invest, said Tirosh, was that CyActive was able to reproduce an attack on the security company RSA in 2013 based on a virus strain identified in 2009.
At the end of February 2014, JVP announced that Titanium Core won its first ever "Cybertition" cybersecurity startup competition held at the RSA conference in San Francisco. Titanium Core will receive a $1 million investment and a place at the Cyber Labs incubator. The startup firm "utilizes a multilayered security approach to repel attacks on mission-critical systems, while simultaneously preventing the threat from moving on to other computer systems and providing real time information on the attack."
TechRepublic: What were the factors over the past several years, and the actions by stakeholders in Israel, including the government and the military, that led JVP to invest in cybersecurity in Beer-Sheva?
Gadi Tirosh: First of all, we need to understand something that changed in the cybersecurity world. The big shift happened roughly three years ago, it really started from the attack landscape. So I often refer to this as the world of cyberattacks moving from the equivalent of "carpet bombing" to "guided missiles." And it happened over a period of probably 12 months.
In the past, at the end of the 90s, a lot of the attacks were denial of service attacks and viruses that were kind of bombarding systems and trying to take things down.
What we've seen in the last two years are tailor-made attacks, very often using off-the-shelf tools, but many of them combined together. Tailor-made to go after specific corporations, specific governments, and sometimes specific persons.
And for this kind of attack you could no longer assume that the firewall can give you protection. Because perimeter defense is broken. And it was clear that the bad guys move easily to the inside using very different methods.
Now when that started, it was clear that you need to come up with a whole new set of solutions. And that really opened up the door for many, many innovative startups to come up with solutions for things that the firewalls and the signature-based antivirus approaches could not do any more. So that was the technology and the drive for it.
And the kind of technology that you need to apply for these attacks are things like anomaly detection, which assumes that the bad guys are on the inside and the only way to detect them is through some very minute anomalies that they create. After they get in, they try to disguise themselves as being part of your system.
One the companies we invested in, ThetaRay, which came out of seven years of academic research at Yale University and Tel Aviv University, does exactly that — detects anomalies in huge data sets.
On the Israeli landscape I would say the following. First of all, on the military level, there are a couple of things you do when you're on the front lines. First, you learn how to defend yourself, probably better than others. And second, from our military legacy we don't just do defense, once in a while we also tend to hit back. And that knowledge is also very useful in coming up with future defense mechanisms.
I think on the government level, they definitely recognize that cybersecurity is an area that Israel has had to defend itself very well at, but also it can be turned into a growth engine for the industry. I think that they are supportive for sure, but as it often happens in Israel, the real pioneers are the technology companies and the technology ventures such as JVP.
It's great that the government is supportive, but I am actually happier that the people leading the charge are the technology companies and the business people behind the cybersecurity industry.
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