Five months after joining Softbank, and about six months after leaving the Mossad, Yossi Cohen is making his first investment in an Israeli cyber company. Yossi Cohen’s role at Softbank was first revealed in Globes. As befits his extensive experience in leading cyber attacks on sensitive facilities, according to foreign sources, Cohen is leading the investment in a merger between two Israeli companies that have each become market leaders in their field: Clarotti, which currently controls the cyber solutions infrastructure in manufacturing plants, and Medigate, which offers a similar solution. To the US Hospitals Market.
As part of the deal, Softbank’s Vision 2 fund will lead an investment of $ 400 million – along with existing investors such as Schneider Electric, Bessemer, Tamask and Team8 – in Clarotti, which will merge into it in a cash and share transaction Medigate, to create a corporation valued at $ -2-2.5 billion, which generates revenue at an annual rate of over $ 90 million and employs 420 people. Through the recruitment and merger transaction, Clarotti de facto becomes the market leader in the field of infrastructure security and connected low-tech devices, competing with the Israeli Armis, Microsoft and F5, which have each acquired other Israeli companies – such as Cyber X and Indie.
If all goes well – the merger will be completed successfully, the company will be able to double its revenues to the $ 200 million range next year, and recruit about a hundred more employees – it is expected to go public within two years at the front door of one of the New York Stock Exchanges. Thus, Clarotti wants to be the largest trading company in the field of cyber security for facilities, as Checkpoint and Palo Alto Networks lead the field of enterprise networks and Sentinel One leads the field of endpoint security.
Clarotti, previously ranked on Globes’ list of promising start-ups, has developed technology that identifies all devices and machines connected to industrial plants and infrastructure facilities, whether these are nuclear reactor control and control systems for power generation, automobile robots, or pharmaceutical packaging machines in pharmaceutical plants. As mentioned, the company has become a leader in the field in the industrial sector, and it secures device infrastructure connected to all Pfizer plants – including those that produce the vaccine for Corona – BMW plants, as well as Siemens and Schneider plants, which are also strategic partners and investors in the company.
“Giant companies do not know all the devices connected to the networks”
Clarotti’s secret begins first and foremost with mapping all the devices in the organization – including smartphones, servers, but also low-tech systems, such as turbines, command and control equipment, cameras and sensors – effectively.
“Giant companies, some of the biggest brands you can think of, do not know all the devices connected to their networks,” Yaniv Vardi, the company’s CEO, tells Globes. “Sometimes it even leads to unfamiliarity with half of the devices.” The connected devices, identify risks, weaknesses and threats and secure access to the systems.
Nadav Tzafrir, the company’s president, who assisted in the company’s growth and initial investment in it within Team8, says that despite the difficulties experienced by the companies in the market, the research team built by Amir Zilberstein and Benny Porat effectively cracked the important protocols underlying the industrial devices. “What is happening now in these worlds is no less than the ‘hockey stick’ phenomenon, in which several phenomena at once create a huge demand,” Tzafrir tells Globes. “More and more physical infrastructures are connecting with innovative technological infrastructures – like the healthcare system that increasingly supports remote medicine, the automotive world that is becoming electric and autonomous, and the world of energies and sustainability that requires connecting old and new worlds to support renewable energy production. As well as there are on the agenda cyber regulation plans by many countries in the world. “
The acquired company, Medigate, is an Israeli company that specializes in protecting hospital infrastructure, from sensors to MRI systems, and mainly protects hospitals in Israel. According to her, 82% of the hospitals are under repeated infidelity and cyber attacks, as has also recently happened at Hillel Yaffe Hospital in Hadera. It was founded by Jonathan Langer, Pini Pinchasov and Itai Krishenbaum, and raised about $ 50 million from the Bloemberg, USVP and YL Ventures funds.
The stars got along
The Japanese softbank, whose investment team in Israel includes Yossi Cohen and Yani Pipilis, the investment manager of Vision 2 in London, has chosen to join the investment as part of support for the giant merger and support for a large cyber company in the field of infrastructure. As a result of the deal, Clarotti is expected to expand its operations in the Japanese market, which is considered the second largest in the world in the field of industry – among automobile factories, nuclear reactors for electricity generation and other production systems.
The deal also comes amid a tense year in which infidelity and cyber attacks by Russian and Chinese hacker groups against commercial infrastructure have escalated. In that sense, the stars seemed to get along for Clarotti and Medigate: In March of this year, a group of hackers tried to infiltrate Florida’s water systems and change their chemical composition with the intent of endangering public health; In May, a group of hackers attacked Colonial Pipeline, which operates major fuel pipelines in the eastern United States, disrupting fuel supply to the area for several days. Eventually, the company was forced to pay the group about $ 5 million; Russian that has shut down its production systems in Australia, Canada and the US.
Earlier, in late 2020, a cyber attack led to the death of a hospitalized in Germany after one of the sensors he was connected to did not warn of danger to her life following the attack.