As we begin to move away from the era of the Covid-19 pandemic and into the age of the ‘new normal,’ it’s beginning to become clear which trends emerging from the health crisis are here to stay. With life becoming increasingly remote, could we be about to see Israel’s excellent cybersecurity infrastructure become an investment haven?
Boasting more startups and tech professionals per capita than any other country globally, Israel’s tech hub credentials are clear for all to see. But how does a country with a population of around 8.7 million grow to become a global leader in cybersecurity?
Back in 2010, Prime Minister Benjamin Netanyahu requested that a five-year plan to tackle national cyber threats be formulated to safeguard the future of the nation. This led to a widespread nationwide level of collaboration between government, military, businesses and universities on the way to an ecosystem that was smart enough to anticipate emerging trends that could threaten the security of Israel.
Whilst most approaches to cybersecurity have been largely reactive, Israel’s proactive approach has led to the country generating a range of pioneering businesses that have become global leaders in terms of dealing with sophisticated threats online.
An Emerging Investment Opportunity?
According to a recent international survey by Robert Half, 44% of CIOs and CTOs consider maintaining the IT security of systems and safeguarding company information to be their priority ahead of 2021. Furthermore, 32% of respondents also said that IT security skills have become the hardest specialism to find since the emergence of the Covid-19 pandemic.
This demand for greater levels of security has been driven by the acceleration of digitization across industries. With the pandemic leading to more employees working from home, the need for ensuring that confidential business information doesn’t fall into the wrong hands is set to play into the hands of Israel’s excellent cybersecurity sector.
Investors are already waking up to the potential of Israeli cybersecurity companies in the wake of the pandemic. Tal Slobodkin of StageOne Ventures identified cybersecurity organizations as a key area of opportunity, claiming that “we do see that COVID-19 has less of an effect on the cybersecurity industry as many organizations are looking for new solutions, as the risk of cyberattacks increases due to remote working and refocusing a lot of their activity to the digital world.”
Ransomware attacks are becoming more frequent today, forcing businesses to take note of more advanced cybersecurity solutions.
It may also be worth the wider world of investors sitting up and taking note of Israel’s advancements in cybersecurity as the emphasis on keeping remote employees safe away from the protection of office-based servers. As trading platforms like E-Trade, Robinhood and TD Ameritrade make it easier than ever to buy promising stocks, there may be a lot of potential for Israeli cybersecurity tech.
Israeli Cyber Security Stocks Inspire Investors
Cybersecurity companies in Israel are well known for their efficiency and dominance across global markets in their respective industries. In the first quarter of 2021, many startups across the country’s cybersecurity sector raised a combined $1.5 billion across 17 financing deals.
Because of these clear signs of growth, reputable Israeli security specialists like Check Point Software Technologies and NICE Ltd may become much sought-after investments among retail investors looking to place their money into companies that look set to experience sustained growth as we begin to transition away from the Covid-19 pandemic.
The success of Check Point leveraged the starting point for two other key Israeli cybersecurity companies. Both Imperva and Palo Alto were formed by Check Point employees, and although both companies are currently based in Silicon Valley in the US, they still have offices set up in Israel.
As data shows, Israel’s cybersecurity sector is flowing with innovative companies. Despite a slight and understandable decline in the wake of the Covid-19 pandemic in 2020, there are still almost 150 more cybersecurity companies in Israel when compared to 2014 – representing exponential levels of growth.
2020 has made for a challenging year across a range of industries around the world. Although some cybersecurity companies have been adversely affected by the pandemic, the rise of remote work appears set to ensure that companies dedicated to protecting work from home employees will prosper in the age of the ‘new normal.’
This renewed emphasis on security will likely see new investment opportunities emerge for retail and institutional investors alike. For a nation that commenced its initiative to ramp up its cybersecurity investments in 2010, this potential newfound investor confidence may be the latest evidence that the country lovingly dubbed as the Startup Nation may be scaling up.