Family Offices Chase Cybersecurity Investment Opportunities as Digital Risks Amplify
Oct 25. 2019 Family offices have been turning their attention to cybersecurity startups as the need for better digital protections accelerates.
Recent high-profile incidents, such as the ransomware attacks on public utilities in the U.S. that crippled critical public infrastructure in Georgia and a data breach of Canada’s leading credit union Desjardin Group that comprised the personal data of over 2.9 million people, have amplified interest in better digital security tools.
Leading the charge is former Ebay executive Maynard Webb’s Webb Investment Network, which is the third largest family office investor in tech ventures, according to Crunchbase. Webb’s portfolio includes Elevate Security, a platform that helps companies analyze employees’ cybersecurity behaviors, HelloSign, a service that provides verified e-signatures, and machine-scale data protection provider Ionic.
Webb’s most noteworthy investment in this space was Okta, a secure access management platform that listed on the NASDAQ at a valuation of $2 billion in 2017 and is currently worth $12.5 billion.
Kapor Capital, Lotus-founder Mitchell “Mitch” Kapor’s investment holding firm, got involved early with True Link, a fraud protection service for senior citizens. The firm estimates that its specialized Visa card protects 11 million at-risk seniors from fraud losses that can be as high as $52 billion annually.
Another family office investor moved operations from Canada to Israel to access the nation’s emerging technology sector. Charles Bronfman’s family investment vehicle Claridge Israel closed a $30 million investment in cyber range training and simulation platform provider Cyberbit last year.
In recent years, Israel has emerged as a hotspot for cybersecurity innovation. The 752 cybersecurity companies in the country raised an estimated $940 million in funding in 2018 alone, according to the Montreal Gazette. However, even that amount barely scratches the surface of an industry that Global Market Insights estimates could be worth $300 billion by 2024.