If it seems to you like a hot new cybersecurity company springs out of Israel every week, you're not far off. Israel is now the world's second-largest exporter of cybersecurity products and services--second only to the US--with exports that grew from $3 billion to $6 billion in just a few years. The secret to its success: military experience. While the technology varies, many if not most of the newest companies have one thing in common: they were founded by veterans of the Israel Defense Force's (IDF) elite cyberintelligence Unit 8200.
"Last year, there were 16 Israeli companies on the Cybersecurity 500 list of the world's hottest and most innovative cybersecurity companies. This year there are 26, and we are expecting more in 2017," says Steve Morgan, founder and CEO at Cybersecurity Ventures. "VC firms and corporate investors have put around a half-billion dollars into Israel cybersecurity startups over the past few years."
Israel's main cybersecurity market is the US, according to Morgan. Many have offices, even corporate headquarters, in the US.
"With regards to Silicon Valley, that is a favorite spot for Israeli cyber firms to set up U.S. offices due to its proximity to [venture capital] firms who invest into cybersecurity startups," says Morgan. "Sand Hill Road is the Wall Street of cyber-funding and the Israeli company founders are smart enough to know the value of being there."
Regardless of where corporate HQ is, most of these companies' R&D operations remain firmly in Israel.
"Israel is the place where you can hire people who 'get' the problem," says Lior Div, CEO and co-founder of Israeli start-up Cybereason. "They add value almost from day 1."
Why do they "get it"? Military experience.
Div says the secret to the recent boom in Israeli cybersecurity companies is a combination of both a change in the market and the nature of Israel and Unit 8200, which he linked together. Div himself won an IDF Medal of Honor for outstanding achievements as a commander of a cybersecurity team in the 8200.
Div says the market changed in 2010 when Stuxnet awoke people to what cyberattacks could truly achieve. "It's kind of a war. Some people say when I use the word 'war' that it's too much. If you really understand what's going on out there, it's not too much.'"
"You needed people with a different mindset," he says. "People who were actually creating the problem, if I may." In other words, cyberdefense experts who have offensive hacking skills as well.
Representatives from several other Israel-based companies say military experience -- and Unit 8200 specifically -- in a post-Stuxnet age have played a significant role in the boom of Israeli start-ups, as well as other attributes and skillsets.
Maya Schirmann of DeepInstinct mentions the support of earlier giants in the industry that were founded in Check Point, founded by three ex-8200 members, and CyberArk. (In fact, one of Check Point's co-founders, Shlomo Kramer, has been on a spree, co-founding or funding several of the newest companies to come out of the country as well.)
Schirmann and Guy Nizan, co-founder of IntSights, both note that the innovation is a function of necessity. Nizan says "our country is under continuous cyberattacks that force us to invest and develop new and innovative technologies to protect ourselves."
Here is a rundown of 37 cybersecurity companies that have sprung out of Israel in just the past four years.