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Temasek, the Singaporean government-controlled company that is one of the world’s biggest investors, is today announcing an acquisition to beef up its cybersecurity business. It is acquiring Sygnia, a startup out of Israel that keeps a low profile, but has built technology and services to help large organizations respond to cyber threats. The price of the deal is not being officially disclosed, but a source close to it says that Temasek is buying Sygnia for $250 million. After the deal closes, Temasek will continue to let Syngia operate as an independent entity.
Sygnia came out of stealth less than a year ago, after being incubated by Team8, an investor/company builder in Israel that itself has been built like a startup, with Intel, Microsoft, AT&T, Qualcomm, Cisco, Nokia and Temasek all backers. Team8’s focus is on cybersecurity, and as such it lives somewhat under the radar, but the other three companies that have been spun out of so far it are Illusive Networks, Claroty and Hysolate.
Sygnia is typical of the makeup of Team8-incubated startups. It was co-founded by a team of elite security specialists from Israel: Shachar Levy (who is the CEO), Ariel Smoler, Arick Goomanovsky and Ami Kor, with its chairman Nadav Zafrir, the co-founder and CEO of Team8 and a former commander of Unit 8200. The basic idea behind Sygnia is both to build technology, tools and services to help an organization’s resilience — both to reduce the likelihood of a breach, and to help the company weather an attack if one does happen. Other members of the team come from military and security industry backgrounds, and generally are always in training, either to hone their own skills or to train customers with whom it works.
Team8 had invested only $4.3 million into Sygnia, the only outside funding the startup had ever taken.
Part of the reason for that is because Sygnia has been generating revenue since before it came out of stealth. It doesn’t name specific customers, or threat incidents that it has helped manage (or avoid, for that matter), but notes that typically it interacts with executive management, boards, and technology teams, and it has customers in the financial, legal, retail and consumer goods products, information technology, media and entertainment, pharmaceutical, telecommunication, logistics and manufacturing sectors, with customers based in the US, Canada, EMEA and Latin America.
The deal should help Sygnia add another part of the world of the world to that list: Asia, both providing services for Temasek portfolio companies and others. Although Temasek will operate Sygnia as its own independent entity, this deal is a sign of how the Singaporean company is ramping up its cybersecurity activities overall: just last month, it formed a cybersecurity joint venture called Ensign InfoSecurity with StarHub, the Singaporen carrier, bringing together Temasek subsidiary Quann and StarHub subsidiary Accel Systems.
If Sygnia’s customer list and trade were both strong and today, more than ever before, cybersecurity is a huge priority (and business opportunity), it’s worth wondering why the startup decided to sell up so quickly. From what I understand, an acquisition by Temasek — itself a huge holding company by way of its many investments — is essentially like securing a dedicated and large-pocketed owner that will help the company scale in an efficient way to meet demand.
“Cyber, in its current magnitude, is a new domain of technology, a new domain of warfare, and a new domain of business,” said Sygnia’s Levy in a statement. “Companies are today confronted with a level of risk which until lately was the realm of militaries and states. We assist them in balancing this asymmetry with ‘military grade security’ – conceptual frameworks, methodologies and technologies built to build resilience and win the battle within their network.”
Team8 will continue to be involved with the company post-acquisition — not least because of the chairman connection.
“Sygnia has built a powerful combination of professional proficiency, methodologies, technologies, and a culture of excellence, which is critically needed in confronting the growing complexity of cyber,” said Zafrir in a statement. “Team8 will remain committed to Sygnia’s success and we will continue to collaborate and work closely together.”