The novel coronavirus has prompted unprecedented cybersecurity threats in all parts of the economy, says Roi Yarom, head of industry empowerment at the Israel National Cyber Directorate.
Israel’s cybersecurity startups have jumped to the challenge – and in tandem posted a 70 percent growth in funding for 2020, raising a record $2.9 billion in 100 transactions.
Israel’s cybersecurity industry accounted for 31% of global investments in the sector in the last year, second only to the United States.
Exports of cybersecurity products from Israel in 2020 totaled $6.85 billion, up from $6.5 billion in 2019.
Unicorns are privately held companies with a valuation of $1 billion or more. Of the global unicorns in the cybersecurity sector, Israel has a disproportionate 33% of the total.
Not all of Israel’s cyber industry leaders raised money last year; some opted for lucrative buyouts: In 2020, more than 20 firms in the sector were acquired for an estimated $4.7 billion.
Cyber-attacks and hacking incidents were already on the rise early in the pandemic. In April 2020, for example, researchers at Israel’s Check Point Software Technologies reported a 30% increase in a three-week period during which there were nearly 200,000 attacks globally per week. The attacks often used fake websites with “corona” or “Covid” in their domain names or emails with coronavirus-related subject lines.
There were also phishing attacks that sought to steal users’ private information purportedly sent from organizations and companies such as the World Health Organization, Zoom, Microsoft and Google. Google reported that it saw 18 million daily malware and phishing emails related to Covid-19 scams in mid-April. Check Point called it “an unprecedented opportunity for cyber-criminals.”
At an October 2020 conference, former CIA director David Petraeus commented that, when Covid-19 hit, “almost everyone moved to the cloud if they were not already there,” which has created a “new opportunity for nation-state hackers, criminals and extremists.”
While coronavirus-inspired cyber-attacks are a global problem, Israel had stayed mostly above the fray. But in December 2020, a massive hack linked to the Black Shadow group targeted Shirbit, one of Israel’s largest insurance companies. The hackers stole terabytes of personal data on the company’s Israeli clients and threatened to release it unless Shirbit paid a ransom. (Shirbit refused.)
“The coronavirus has caused an unprecedented shift in the volume and pace of physical activity into the online space,” the Cyber Directorate’s Yarom notes. “The growing threats have created additional opportunities for the Israeli cyber industry, which has proven once again this year that it is a national growth engine and an essential component of national resilience.”
The Israel National Cyber Directorate invests resources into academic research, works to increase human capital in the field, and pushes to create relationships with countries that have the potential for commercial opportunities, joint research and development programs.
“The success of the Israeli cyber industry is first and foremost the achievement of its entrepreneurs, managers and investors,” Yarom adds.