“The next Palo Alto Networks has already been born, and it is probably in Tel Aviv” - CTech
Israeli cybersecurity industry is on the verge of producing another global leader, with venture capitalist Ziv Conen stating 'the next Palo Alto [Networks] has already been born, and in all likelihood, it happened in Tel Aviv.'
Ziv Conen, a partner at venture capital firm New Era, believes Israel is on the brink of producing another global cybersecurity giant. With Palo Alto Networks recently becoming the first Israeli company to reach a valuation of over NIS 1 trillion and reports suggesting Cyera is pursuing a $20 billion funding round, Conen sees a transformative moment in the industry. 'The next Palo Alto [Networks] has already been born, and in all likelihood, it happened in Tel Aviv,' he stated.
Conen brings a unique perspective to the cybersecurity landscape. After serving in Unit 8200, earning degrees from MIT, and working at McKinsey, he settled in Boston where he now leads New Era alongside Gidi Argov and Ran Simha. The firm has invested in 40 companies, including two unicorns: Papaya Global and Optibus, with notable exits like the $250-300 million sale of Apono.
AI reshaping cybersecurity
According to Conen, artificial intelligence is driving three major shifts in cybersecurity. First, the emergence of AI agents creates new categories of identities and permissions requiring security. Second and third shifts relate to speed—both attackers and defenders can identify vulnerabilities much faster, though defenders struggle to keep pace with neutralizing threats. 'CISOs tell us that their ability to neutralize threats is not keeping pace with the speed at which they can detect them,' Conen explained.
It is not easy for an established company. Building a genuinely new platform may require it to cannibalize its existing business. It needs to overhaul its architecture and integrate categories and products that were developed separately, such as endpoint protection and AI security. In some cases, it may even have to compete with products it is already selling. It will be easier for a new company to start with the right architecture.
Israeli entrepreneurs' edge
Conen believes Israeli entrepreneurs have a unique advantage due to their military intelligence experience, particularly from Unit 8200. While academic programs focus on defense, Unit 8200 provides extensive offensive experience that helps founders understand how attackers think and operate. 'Someone who understands how an attacker thinks and operates brings a significant advantage, even when building a defensive product,' Conen noted.
However, Conen emphasized that military background isn't the only path to success. New Era has a company in its portfolio whose founders included an ethical hacker who managed a community of 5,000 hackers on Telegram, using their feedback to build penetration-testing capabilities. 'It is possible to acquire the necessary knowledge and experience through other paths, although those paths are admittedly more difficult,' Conen admitted.
Capital's growing role
Despite New Era's relatively small size—its first two funds totaled $200 million while its third fund is closing at $120 million—Conen believes smaller funds can compete by getting to know entrepreneurs before larger funds enter the picture. 'Our advantage is that we get to know these entrepreneurs long before other funds start competing for them, often before they become well-known names in the venture capital world,' he stated.
When asked whether technology or capital determines a company's fate, Conen acknowledged the increasing importance of funding. 'Capital carries enormous weight today, perhaps even more than we would like to admit. If you have good technology but two competitors have each raised $100 million, they can hire far more salespeople, reach more customers and grow faster,' he concluded.
Related
