Security incubator with ties to Israeli military forms with $18M

View original post on GigaOM

A new Israeli-based cyber-security incubator called Team8 plans to announce its launch on Tuesday and is banking that its ties to the Israeli military will give its startups a competitive edge in the crowded security startup market. As part of the launch, the incubator also landed an $18 million dollar investment round from Bessemer Venture Partners (BVP), Alcatel-Lucent, Cisco Investments, Marker LLC, and Innovation Endeavors.

Team8’s founders — Nadav Zafrir, Israel Grimberg and Liran Grinberg — are all veterans of the Israel Defense Forces Unit 8200, which Zafrir described as being the National Security Agency of Israel. This particular unit, which Zafrir said he commanded during the last half of his military service, is responsible for intelligence gathering and national security, with former members of the unit having gone on to build some of Israel’s largest tech companies, like the Tel Aviv-based Check Point Software Technologies. Unit 8200 has also generated some innovative security companies over the years like Hexadite, which formally launched last July.

Zafrir described Team8 as a “startup of startups” that operates like a think tank in that its core team and staff spend a considerable amount of time doing research, albeit not for policy reports to influence governments. After researching specific areas in cyber-security that the team wants to tackle, Team8 then tries to find the right security experts who are best suited for potentially creating a startup that can solve the issue; these experts typically come from Unit 8200, but they don’t necessarily need to be, Zafrir said.

After an entrepreneur or security expert signs on, Team8 in return gives them the typical incubator perks including helping with the logistics of starting a new business.

The entrepreneurs that Team8 decides to work with will be provided with funding, technical guidance, go-to-business planning and anything else it takes for a successful startup to get off the ground.

Team8 will be different than a typical incubator in that it will be “taking in people and developing the concepts and technology in-house,” said BVP partner David Cowan, and the plan is for these companies to remain independent and not bound to the larger companies that are financially backing the project.

The first area of cyber security that Team8 wants to tackle relates to the idea of preventing the kind of massive data breaches like those seen at Target andSony through a thorough understanding of the hackers behind the attacks, whether they be criminal syndicates or nation-states. Zafrir wouldn’t elaborate on how exactly the first company in its portfolio will be addressing this, citing that the company (led by former Check Point Software veteran Ofer Israeli) is still in stealth (and still figuring out a name).

“Our thesis for this specific domain is that at the end of the day, it is not about the malware,” said Zafrir. “You have to think about the people behind the malware.”

Team8 is currently backing two companies with one in beta and the other starting its alpha program the next quarter, and the ultimate goal of the incubator is to build four to six companies in the next few years.

For BVP’s Cowan, a successful 2015 means that Team8 will have spun out at least one company that has workable technology, solid leadership and a couple of customers. Cowan said he has “a good sense of what project it is” that he bets will be the incubator’s first successful company, but he wouldn’t elaborate on more details only to say “We will have our first company up and running by the end of the year.”