Cyber Security Software For Businesses
Perception Point is a cyber security company. It’s created what it calls the “last” email cyber product a business will need to buy.
That’s because this company’s software achieved a 90% accuracy rate for detecting security threats, beating notable competitors like Microsoft. One company created an internal team to try and break Perception Point’s security measures —and was unsuccessful.
The company’s proprietary system is a hardware-assisted platform, or “HAP.” This serves as the last line of defense against cyber attacks, and is able to evaluate how computer processors run code and even find malicious code buried deep inside of files.
Perception Point is led by CEO Yorma Salinger, former CEO of Red Bend, a software company acquired by Harman in 2015 for $200 million.
The company started selling its products in late 2018. Now it's ready to expand. It’s currently raising up to $6 million in a Series B round. This round is led by Pitango Venture Capital, which invests in IT-related startups and, to date, has achieved 50 successful “exits.”
(Please note: This particular startup is raising funds from accredited investors only. An accredited investor is someone with a net worth of at least $1 million, or annual income of at least $200,000, or $300,000 with their spouse.)
Cyber attacks are on the rise. According to the Center for Internet Security, between December 2018 and January 2019, there was a 61% increase in the number of attacks using what’s called malware.
Malware, short for “malicious software,” is designed to disrupt, damage, or gain unauthorized access to a computer. According to studies, more than 92% of malware is sent through e-mail, primarily by using a tactic known as “phishing.”
Phishing is when attackers try and access information by sending malicious e-mails disguised as something innocent — for example, an e-mail asking you to change your password on your bank account, or a request to click a link to address an urgent security issue.
If victims download files or click links in these e-mails, malware can be installed on their computer.
In 2018, 83% of businesses reported experiencing at least one phishing attack. And according to statistics from Alert Logic, a cyber security website, as of 2017, the average computer user received 16 malicious e-mails per month. A company with just 20 employees, for example, would have nearly 4,000 malicious e-mails per year.
In addition to e-mail, social media platforms have become common tools for cyber attackers. A recent study from Bromium, a cyber security startup, found that 1 in 5 businesses have been infected with malware from social media.
With companies at such a high risk, the Advanced Persistent Threat Protection market, part of the larger cyber security industry, has grown to $4.3 billion. By 2023, this market is expected to reach $9 billion.
Meanwhile, several publicly-traded cyber security companies have achieved huge market caps, for example:
• Proofpoint (Nasdaq: PFPT) has a $7.1 billion market cap.
• And both Mimecast (Nasdaq: MIME) and FireEye (Nasdaq: FEYE) have market caps of $2.9 billion each.
Furthermore, M&A activity in this sector has surged. This year, for example:
• Insight Partners acquired Recorded Future, an IT company focused on real-time threat intelligence, for $780 million.
• Carbonite acquired Webroot, an Internet security company, for $618 million.
• And Proofpoint acquired Meta Networks, a “cloud” security company, for $120 million. This acquisition price was more than 100x Meta’s annual revenues.
Perception Point differs from its competitors by offering more advanced, predictive cyber security.
Most competitors use one of two methods to determine if content is malicious: Sandboxing and CDR.
Sandboxing is a security mechanism that separates running programs. If the computer receives an unfamiliar code, this measure isolates the code from other programs, enabling damage control in the event the code is malicious.
CDR, short for Content Disarm and Reconstruction, removes potentially malicious code from files by eliminating all components of that file that aren’t pre-approved by the system.
The problem with sandboxing is it takes between 7 and 20 minutes to complete a file scan. In addition, advanced malware can actually recognize when it’s being run inside a sandbox and turn off its malicious code before it triggers a red flag.
While CDR takes only a few seconds to scan for issues, only files are checked, not URLs. Furthermore, there’s no ability to detect or analyze incoming threats.
Perception Point, in contrast, uses its HAP to evaluate the way processors react to malicious code and provides a visualization of exactly what the program is asking the computer to do.
For example, malicious software may ask a computer to automatically open a program, then complete a few other tasks that look harmless before attacking the system.
The HAP is able to “unpack” attachments and links, and detect malicious code buried deep inside a file or URL. This means even if the code’s hostile intentions are masked by non-threatening requests, Perception Point’s software can discover this and protect the system.
At the same time, HAP is able to store the malicious code’s specific actions in its database for future reference.
According to Perception Point, most hackers reuse code they created or accessed from open source websites. This means once HAP has identified and stored malicious code, it’s able to quickly identify similar code in the future.
Perception Point sells its software-as-a-service using direct sales and channel partners. The company prices its software based on the number of employees a company has, and achieves gross margins of approximately 50%. Moving forward, the company believes new deals and upgrades to its software will increase margins to 72% by 2020.
With funds raised, Perception Point will increase its sales and marketing efforts, and aims to reach $8 million in sales in 2020.
Prior to starting Perception Point, Yoram was CEO of Red Bend, a software company. He served in this role for 15 years, and was instrumental in its acquisition by Harman in 2015 for $200 million.
Before Red Bend, Yoram spent more than two years in the technology industry, leading global strategies for businesses.
Shlomi began his career in the Israeli Intelligence Corps, where he served in a classified, elite cyber unit as Officer & Research Squad Leader.
From there, he became a security software engineer for Trusteer, a cyber security company acquired by IBM (NYSE: IBM). He then worked for two years at Cyvera, an internet security company that was acquired by Palo Alto Networks in 2014.
Shlomi earned a Bachelor’s degree in Computer Science from Bar-Ilan University.
Prior to Perception Point, Michael was a cyber security expert and systems architect with PayPal (Nasdaq: PYPL).
Before that, he was Chief Software Architect for CyActive, a computer and network security company.
He began his career in the Israel Defense Forces, serving as a software developer and team leader.
He earned a Bachelor’s degree in Computer Science from Ben-Gurion University.
Corie has 15 years of experience in global marketing and strategy. Throughout her career, she has led companies in the insurance, banking, beauty, and healthcare industries.
A VC firm based in Asia investing in early-stage companies.
Leading Israeli venture fund.
An Israeli VC firm focused on early-stage investments.