Amir Zilbersetin (CEO), Galina Antova, Dr. Benny Porat
Team8, Temasek, Siemens, Schneider Electronic, Rockwell Automation, Bessemer Venture Partners, Mitsui, Innovation Endeavors, ICV
In the offices of the Team8 cyber security group in the sleepy Nahalat Yitzhak neighborhood on the border between Tel Aviv and Givatayim, Claroty is developing a security solution designed primarily for critical infrastructures: power stations; oil refineries; water; transportation; and chemical and pharmaceutical production plants. A third of the world's companies rely on industrial networks in their activity, but up until recently, the cyber defense market for them was small to non-existent.
Claroty's solution is based on a thorough examination of the various components within these specific networks and the communications between them. On this basis, the company's platform provides real-time alerts of disruptions to normal work processes on the production networks in order to eliminate the possibility of cyber attacks. Behind the platform is a 15-strong research team. That may not sound like a great many people, but today it is one of the biggest teams in the sector.
"We saw that there are networks here that ordinary security doesn't cover, and that need to be covered," says Claroty cofounder and CEO Amir Zilberstein. "What happened in the past two years, which made possible our strong growth and the recent financing round, was that the cyber threat to industrial networks materialized, with damage in the hundreds of millions of dollars in an average incident."
Nevertheless, you are not the only ones in this sector. How are you different?
Zilberstein: "We cover all of the different layers in the industrial Internet of Things. Conventional solutions cover only the upper layers, such as servers and operating systems. We also cover the bottom layers unique to the industrial sector, such as sensors and control panels."
In the financing round mentioned by Zilberstein, completed six months ago, Claroty raised $60 million from industrial companies and control panel suppliers, headed by Siemens, Rockwell Automation, and Schneider Electric.
"Companies like these build networks and supply equipment for all the major infrastructure companies, such as Israel Electric Corporation (IEC) in Israel and its counterparts abroad. Even though they compete against each other, they invested jointly in Claroty in the realization, reaching to the very top management levels, that this infrastructure must be protected," Zilberstein declares.
How is this realization manifest?
"In the very deep partnership we have with these companies, beyond the investment. They take us to the market and to their customers, who rely on them to build the networks properly. In recent months, we saw that going to the market with them was dramatic for us."
When it was first released on the market, the platform was able to detect irregular behavior on industrial networks, based on a study of normal behavior of the various networks and the components in them. Today, Zilberstein says, the platform is also capable of detecting security vulnerabilities that have not yet been exploited, thereby preventing zero day attacks.
"We were aiming at this capability from our first day, something that could be called the holy grail," says Zilberstein. "We're capable of detecting risks in advance and telling the customer what has to be done to prevent an attack, the order of priorities, and the importance of the actions."
Claroty was founded in the framework of the cyber platform of Team8, a venture capital fund that founds cyber companies and invests in them with the aim of turning them into important players in their fields.
The group finds areas in the cyber realm in which there is a need for a technological solution, then searches for a management team to lead the startup that will develop the solution, while try to locate talents from the technological units in the army. Another company in the group, Sygnia, announced two months ago that it had been sold to Singapore company Temasek for $250 million.
"We began the incubation with Team8 in 2014, and now, after two and a half years of sales and with 100 employees, we have dozens of customers –large companies operating critical infrastructure and also from other sectors," Zilberstein boasts. "Many of our customers are Fortune 100 companies, and many of our deals are in seven figures."
The company does not disclose its annual revenue, but Zilberstein says, "We'll close the year with over 200% growth, and last year, we tripled our growth. We continue to grow, and want to recruit at least 60 employees in the next year."