Microsoft to buy Israeli cybersecurity start-up CyberX

U.S. software giant Microsoft Corp. is expected to announce in the coming days that it will buy CyberX, Israel’s industrial cybersecurity start-up, for $165 million. CyberX has raised $48 million from investors since it was founded in 2013, most recently after raising $110 million in corporate valuations in April 2019, people familiar with the matter said.

CyberX has developed an IoT network security platform for plant and industrial control systems that uses machine learning to analyze real-time activity and identify anomalies. The IoT world is different from Microsoft’s computer and server network security in many ways. CyberX’s customers are in the power, energy, water, pharmaceutical and other industries that operate critical industrial facilities and infrastructure.

The company was founded by CEO Omer Schneider and General Manager and Chief Technology Officer Nir Giller, both veterans of the Israel Defense Forces Encryption Force. According to the Israeli Companies Registry, they each own nearly 6 per cent of the company. CyberX employs about 100 people, half of whom are in Israel’s research and development centers and the rest in Europe and the United States.

CyberX investors include venture capital funds Norwest Venture Partners and Glilot Capital, which hold about 22 per cent and 19.5 per cent, respectively. Other investors include Flint Capital, Inven Capital (8.5 per cent), OurCrowd (7 per cent) and Qualcomm Ventures (6.5 per cent), which own about 13 per cent. These holdings do not take into account employee options, typically 10 to 15 per cent.

Microsoft to buy Israeli cybersecurity start-up CyberX