From Tel Aviv, Cyera at $12 billion looks like a huge thing. From New York, Cyera at $12 billion looks like a small thing that's going to be huge. Tell me about a challenge, something difficult you faced and how you overcame it as a team.
And seeing the path to becoming a $100 billion market cap company and then a $200 billion market cap company, you see that path. It's really fun, we're having a blast.
What are the main things that pop into your mind when you wake up and say, okay, this thing needs to be handled today?
You wake up every morning and you want to go conquer the world.
Will there be a next round for Cyera at all?
Right now, for us, it's about the billions and how we shorten our path there. In a SaaS company, there's only one thing you're ultimately measured on: revenue.
How are you? I'll just say we're here at the studio, I don't want to say special, but we're here in your beautiful offices, right? We have all the roll-ups here behind us. Thank you so much for hosting me in New York. I flew in especially, you know.
Just kidding. I had two weeks of meetings here, and today is my last day of reserve duty. But I'm very happy. Actually, we already talked about this on my previous visit to New York, I don't know if you remember, and we were supposed to do this, so welcome.
Usually they come to my studio. Also, congratulations on the announcement of the round.
Thank you, thank you very much.
That was leaked earlier and now it's officially out.
Yes, the Israeli press has no patience to wait for the ink to dry on the page. They like to spread it before.
So tell us a bit about what you announced.
We actually did an additional funding round now of $600 million at a $12 billion valuation. It's a very, very nice milestone, and I'm especially happy that it came at a very fast pace from the previous round. It shows the continued progress of the company, the growth of the company, and the accumulating results. It's really a great round, and I think for Cyera, it gives us the ability to be even more aggressive, to go even stronger into the market, to invest in our product in terms of engineering, to grow the team, to invest in the team, and also in our ability to make acquisitions and grow our platform for customers in a strategic and calculated way.
This round was led by Evolution together with Cyberstarts, who also participated significantly.
I know the partnership of Cyberstarts. Yes, of course. The version is a bit big for it. But many investors joined, many insiders put in more money, and also several external investors joined and added to the cap table. It's really nice to see the confidence of the investors in the company, but ultimately this follows the customers. The work is done in the market: building the best product and taking that product to market in the best way. I think when you succeed in doing that consistently and increasingly, the world also knows how to appreciate it in terms of venture capital. So I prepared you a bit before the conversation. We sat here for a short coffee, a minute and a half, and we chatted a bit, as we always do before the episode. I told you I'm going to ask you some challenging questions about metrics that were leaked or not. But before that, I want to take two steps back because here we are at the idea. I want to open everything up. Tell us a bit about what you do that enables this growth. What is the core business? What did you build that enables this?
Cyera does something very significant. Historically, we were a data security company. We dealt with the information that organizations hold: identifying what information they have, what sensitive information, who can access it and what they do with it, who takes that information out of the organization and where. That's the world we grew up in. And we built the company. I think something amazing happened for us and for many others in the market: the AI revolution. If you look at our customers, mainly the Global 2000, the largest companies in the world, a new role was created called the Chief AI Officer.
The Chief Data Officer is also quite new.
Okay, he's also quite new. He's not as new as the Chief AI Officer, but he's still quite new. And these people, the Chief Data Officers, who were data people and already partners in our deals, even though we are a security company, we mainly sell to the Chief Information Security Officer. The data people and data teams are full partners in these projects.
These people essentially became responsible for AI. When we look at AI, ultimately there's the model and the data, right? We all generally have access to the same model.
The information we can give that model is different.
The context, so to speak.
And each organization, these are organizations that have been in business for decades, some for centuries, and have accumulated a lot of knowledge about their business. They see this data, the information they have about their business, as their competitive business advantage in the AI era.
Let's bring this down to earth for the listeners. The worlds of cybersecurity, data, and AI come together. We say, okay, I'm a large organization, Oracle or Microsoft, it doesn't matter, and I want to use large language models today to perform actions within my organization. Today, these models, when we talk about ChatGPT and all those things, they learned from their own data and generate answers based on that. My ability as an organization to take my proprietary, sensitive information, like my database, my CRM, anything else I keep, is the significant event. And you're saying the story was that you were in data security, and you introduced me to that, and now AI comes on top to perform smart actions on the internal data. That gives you another opportunity. Is that the story?
Yes, I wouldn't even say another opportunity, but it creates a certain urgency for the adoption of our tools. Because otherwise, I can't adopt AI because my data isn't secure. Someone might come and ask Claude questions, and it will start giving me answers from the data of some other organization. And that positions Cyera in its infrastructure position.
And do you actually see within your customers, and this question isn't even related to cybersecurity, do you see more and more adoption of AI models on their internal data already now?
Absolutely. We all know this. The moment you get your enterprise code or your ChatGPT Enterprise, the first thing you want to do is connect it to everything. You go through the connectors and say, why can I connect as many as they'll let me? You'll connect them. That human intuition of wanting to give it all the data so it will be the best is charming, and on a personal level, for your personal data, do what you want. But when you're a global, regulated organization with customers, contracts, and agreements across the globe, this thing is incredibly complicated. How do you do it without finding yourself in a serious breach, data leaks, data exposures, lawsuits, and customers leaving? It's a very, very, very big problem for them.
So let's give this some signs. In startup language, but also ultimately what is it? Is it an expansion of the current solution, a complete pivot, another line of products? How does it manifest? There are two trends here. There are two trends. There's the market and the change in the market, which simply has much greater urgency regarding data security. And there's the change in Cyera, which is growing from a data security company to a full AI security company, adding additional capabilities to the product, to the platform, that allow us to offer a solution for AI adoption that is much more holistic than just data elements. These two trends together create tremendous momentum in the market and essentially allow us to become a much, much, much more strategic solution and partner for our customers. I was lucky to be at Davos in January, and when I talk to the CEOs of these largest companies, they don't understand the technology, but they understand that it's a critical component for their organization's ability to adopt AI seriously. It's very, very, very interesting to them, and they not only send me to the CISO as in the past, but they stay or put someone on their behalf to be part of the conversation and make sure this happens.
Because it's not just a matter of security, it's also a matter of the ability to streamline business processes.
I want to, okay, so this is the first act. We did some introduction. Let's maybe remind the listeners, before the hard questions, when did you start? How many employees? You're already expecting the hard questions. You already know the hard questions, so what? Before we started, you know them. So what? When did Cyera start? How many employees?
Cyera is five years old. We actually started five years ago in Israel, a group of engineers around a table. Today we are about 1,500 employees. The company's headquarters moved to New York to be closer to our main market, the United States, and to be closer to our customers. I've been here for four years already. When we started selling, we moved the family, the kids, and the dog, and we came to New York. The next day I was already at a conference. I think Cyera today, in the cybersecurity market, is in a very, very, very significant position. And also to help the CISO with the thing that is most important to them: their way to say yes to AI without feeling that they are completely exposed on the security of their organization, to do it quickly, in a way that ties them and makes them part of this project and not opponents. Think about what it's like to be the person in the organization who has to stand up and say, are you sure you want to do this? There's no way to stand.
The wave is too strong, it will just wash you away, throw you on some rock, you won't be able to stand in that position. And they understand that well. I think for many of them, we are a significant part, if not the main part, of their way to say yes. We can do this, and here's the way we'll do it, and we won't lose control completely, and we won't lose security completely. And that position has made us a very, very, very valuable partner for them. I think it met us at a very right time in terms of the company's development, the scale of the company, our market presence, the customer references that have been with us for several years, have had a lot of success with us, have grown with us, and can talk about what they do with Cyera and how they do it. That means we are at a stage where, on one hand, we already have size, power, and market presence, and we are able to catch this wave and take it where it can go. On the other hand, we are still young, small, and intimate enough that we can move fast, close loops quickly, change quickly, and essentially adapt to what's happening.
First act is over, we have a few more acts. Second act, I want to talk about the growth. And here I already say, I said this to your representatives on earth when we finished the idea. I'm not here to criticize, but I do want to understand the facts. Ultimately, from what was published in the media, you crossed $100 million. I assume you won't want to comment on the exact number in sales. Looking at a valuation of $12 billion, I joked about this in a previous episode that hasn't aired yet, it will probably air after this episode airs, that if you look at the dollar exchange rate from the beginning of the year, it's not $12 billion, it's $9.5 billion.
In relation to the dollar-shekel exchange rate.
To our delight or sorrow, we spend more in dollars than we spend in shekels.
It's all good, it's just $12 billion. And then when you look, for example, at Wiz and large rounds of companies that lead or led the category, you received a higher multiple on revenue. And I come and say, maybe there's an illusion here, and also Cyberstarts probably, and all the other investors who joined the round, come and say, okay, Wiz as a sentiment opened the appetite for the funding scene to see an even more significant outcome, because ultimately that's what we want to see.
So that's one side of the question. The other side, and here I really, there's a very, very impressive growth rate. And you, unlike the folks at Wiz, I'm intentionally comparing. I hope that's okay. The elephant in the room needs to be discussed. They were second-timers, and it was clear to everyone from day one that this was going to go and so on. Here, it wasn't necessarily clear at the beginning. What is your actual execution secret? What do you do de facto to ensure a sales pace that justifies the valuation beyond the current valuation? Yes.
So you asked a lot of questions here. You described them as two, but there were several questions here. I think I'll relate to different parts of this. I think the first thing to understand, and again, these are things I think the update version in Israel happens slower. Yes, but look at the cybersecurity market, forget about me for a moment. As of yesterday, Palo Alto Networks was trading at an all-time high. Don't hold me to the number, I could be wrong here, but around $250 billion. This wasn't the case before.
And that's after the stocks fell and then recovered. Yes, yes, the market is volatile. But ultimately, I'll say, we are currently at a point in time where the leading cybersecurity company in the world is trading at $250 billion. A year ago it was half.
Five years ago it was $35 billion. That is, forget about Cyera and the movement of Cyera in the market and how we grew. The cybersecurity market has grown by almost a factor of 10 in the last five years in terms of what the leading company is, the size of the leading company in this market. Now, Palo Alto is maybe the leader, but there's also CrowdStrike right behind it, and Fortinet, and many others. We are ultimately players within this market.
Yes, so I think the market itself is getting a tremendous boost from the AI revolution. If anyone was confused and thought that cybersecurity is a market that is reaching some kind of plateau or ending its path.
That we've reached some ceiling.
The MITRE attack framework turns cybersecurity from an IT event into a national American event. Every CEO of every company in the United States has been busy understanding what this MITRE thing is and how it affects their organization in recent months. And the entire cybersecurity market is getting tremendous focus and spotlight. I don't know if I'm happy, but I'm pretty sure this thing is only going to intensify as the AI revolution progresses. So you're saying in this context, because when they released the MITRE model, that's Anthropic's model for those who don't know, if you haven't been on planet Earth in recent months, it's essentially the model they first released internally and invited CEOs of companies in the economy to see the weaknesses it finds in software and technology companies. And essentially what happened was an interesting event because once it was announced, there was initially, and generally every time Anthropic releases a model, there's movement in the indices. Initially, there was a drop in the stocks of security companies, first and second tier. And then at some point, because everyone said, well, Anthropic will just do cybersecurity for the whole world. And then at some point, we come and say, well, that's not really what will happen. On the contrary, here, the models allow finding more and more weaknesses, and more and more solutions are needed for this. And then we saw a renewed uptrend. So this is just a recap of how we got to where we are in the last six months.
And ultimately, I'll say, cybersecurity is fundamentally related to the digitization of the world, to how dependent we are on the digital world. And overall, AI marks a vector of many things that today might still be human-based and will become digital. Therefore, the importance of cybersecurity, the need to invest in cybersecurity, the need to develop in this world only grows. Yes. I think our business at Cyera is at a very, very, very nice point. That is, we've already done quite a bit, but as much as we've done quite a bit and it can be perceived as some kind of success, ultimately when you look at the world, we haven't even scratched the beginning of the market and its potential. So the ability to show that you can become a very important player for your customers, which is also backed by how much they pay you, which is backed by how much they grow with you, what they plan to buy from you next, the ability to show this on some small subset of the world that is not very small but still small, the extrapolation, the need that is being addressed by this company today exists at a scale of 1,000 times what they've done so far. So you can grow a lot, a lot, a lot more. Now, one of the things that feels and is seen in the United States, and particularly in New York, is scale. Israel is ultimately a very intimate and small place.
Tel Aviv is a very, very intimate and small place. And I think from Tel Aviv, Cyera at $12 billion looks like a huge thing. From New York, Cyera at $12 billion looks like a small thing that's going to be huge. Okay.
That is, the ability here to look and say and see the path to becoming a $100 billion market cap company and then a $200 billion market cap company. You see that path, and it is, to a large extent, much clearer and more defined than the path to initial product-market fit and a product that customers really respond to and successfully acquiring first customers when you are, as you said, a first-time founder from Israel who doesn't know the market and doesn't know anyone. That is, the company's situation is already completely different.
So let me ask from an unexpected place.
Because we live in our world, and there's a phenomenon of cybersecurity entrepreneurs in Israel, a blessed phenomenon by the way, that has a lot of good. Teams at the beginning of the road that haven't yet found full product-market fit are being acquired for hundreds of millions of dollars by the big acquirers. This thing, I'm not asking you now to say we received an offer or not. I'm saying, ultimately, when you're two or three years into the journey, suddenly someone comes and says, forget it, why do you need to raise more, do some secondary, move to New York, and sell? Take $50 million or $30 million home, you know, try to do big. It's very tempting. The mindset of saying no, we're going all the way and building this big, actually, most people don't choose it. Ultimately, effectively, that's the event. So I'm saying, what do you tell yourself, assuming there were what's called along the way, some decision gates, what do you tell yourself and how do you maintain this mindset that we're going to build a business here, and a journey that will probably last at least 10 years, hopefully?
Yes, I think there are several elements to this thing. The secret is actually very, very, very funny. You need to enjoy it. If you don't enjoy it, then why would you do it? You can make enough money in many ways, and certainly you don't need to do something of this magnitude. So I think a lot of people don't really enjoy what they do. They're scared to death. They're stressed. You know, the founder horror stories, we grew up on the founder horror stories. Now, I'm not saying being a founder is easy. It's not easy at all. It's very, very, very challenging and hard. But for me, and I hope also for the people around me, not just as a founder but the company, it's really fun. We're having a blast. We get to build something crazy, do things at a psychotic scale, challenge ourselves. We live life at an unbelievable level of excitement and intensity. And I think for me, for my partners, for the company's leadership, I always say there's no prize at the end of the rainbow. We won't reach the end of the journey and say, wow, we've arrived at the promised land, now it's good. You have to enjoy it. I had two children during Cyera so far, and I hope, touch wood, to have more. I live my life. I have a family, I have friends. I try to enjoy the journey. That doesn't mean we don't work very hard. It doesn't mean it doesn't demand a lot from you. It doesn't mean there's no pressure and things that weigh on you. But ultimately, if the experience is one you enjoy, you wake up every morning and you want to go conquer the world. You enjoy the opportunities you get. You enjoy the occurrences. So then you also want to continue. At least for me, I say, this is a lot of my engine. And I also very much try to make it this way at Cyera across the entire population of the company. I want it to be a place of hard work, but if you don't enjoy this hard work, if you're not having fun, if you don't say, wow, this is the most amazing company I've ever worked at, how much fun I have. I love the people I work with, I love the opportunities I have. Then, well, what for? My grandmother always used to say, even socks won't bury you. Money is nice, it does all kinds of things in life, but ultimately.
You have to live. You have to live and enjoy the life you live. So here I think I'm reaching the point that perhaps interested me most personally, as Guy, as an investor in the industry, and as a host.
And it seems to me your profile in general, yours as partners.
Also what did you do before Cyera? And let's, you know what? Let's start with that. Tell us a bit about the background that led you to Cyera.
Ultimately, I'll say the companies, with Yonatan, our R&D head in Israel, Yonatan Itay and Tamar.
Yonatan actually joined as a partner, right? He wasn't a partner from the start.
Yonatan, we wanted him to be a partner from the beginning. He had to finish some things, it took us a moment to sort that out afterwards. But he is truly a partner of ours on this journey in every sense, and the most amazing person I know. He grew with us in these five years in an extraordinary way. We were friends, we served together in the army, we did a lot of our service together, and later in cybersecurity. There was a very strong friendship with a common language, and on the other hand, a huge difference between the people. I think each of us brings different capabilities, skills, mindset, and way of thinking. Give an example of something that is different, that complements or contradicts.
Not entirely. I think Yoni is ultimately a very, very, very analytical guy and very, very, very deep. He goes deep into things, dissects the problems, and knows how to take something and really understand every aspect of it and analyze it. I think Tamar is truly one of the best thinkers I know. He thinks on his feet, amazingly. He thinks fast, very fast, analyzes and understands situations, questions, challenges. And I think I am very strong on the emotional side. That is, understanding people, understanding their motivations, exciting them, moving them, creating an emotional connection with them. I hope I'm not completely clueless in the other areas as well, but these are certainly the things I feel I bring to the table within this group.
Tell me about a challenge, something difficult you faced and how you overcame it as a team.
A challenge? There are challenges.
An example. We can go back to the beginning of the road when things were less, I'm sure the troubles grow.
Yes, but a place where the uncertainty was a bit greater. Let's put it that way.
Yes. I think ultimately, our first year in the United States, our first year in business, was not a good year. We had a very weak, very, very challenging first year.
We didn't succeed in selling.
Let's create some clarity here for everyone. In a SaaS company, there's only one thing you're ultimately measured on, and that's revenue. The product needs to drive the sale. Of course, the product needs to be good, it needs to be amazing, and it needs to solve problems for customers. But if you don't know how to sell it, if it doesn't sell, then it's not good. Ultimately, there's one number. As Aviad Eyal always told me, there's only one metric that interests me: what did you do, what did you add in the last quarter? Everything else is details. But ultimately, that's the lifeblood of a SaaS company: the ability to sell and generate more. So it's important to focus on this. I think in our first year, it was very hard. The category was very, very noisy with many players. There was a lot of confusion about whether DSPM would be or not, whether it's a thing or not. And it was very hard to do business. We tried incredibly hard, worked no less hard than we work today, and it didn't succeed like it does today. The response from the market was lukewarm. We managed to close customers, but with great effort. The market wasn't pulling from the market. It was very challenging. Also, we had a lot to learn about the world of enterprise go-to-market. What is this thing? How do you do it? Salespeople, we didn't know this world. Where does this happen? This was the first thing we sold in our lives, and we had to learn, get into it, understand who the professionals we want to work with, what they look like, how to work with them, what it looks like when it runs and when it doesn't. It wasn't simple in the first year. We worked very, very, very hard and tried very hard, and we didn't see success from it.
Yes, so what? If you today, I'll ask this differently. You today, supposedly, meet entrepreneurs at the beginning of the road who come and say, Yotam, okay, invest, advise. What do you recommend they do that you say, I didn't know when I was you, that I think you should do now?
The best advice I received at the beginning that I didn't understand how important it was until later was from Avigdor, who told me, Yotam, until $20 million in revenue, you sell everything. Every dollar, you sell it. I think that's the best advice.
That was the best advice. Why is it the best advice? Avigdor gave it to me, and I needed a moment not to understand it in order to understand it. But it was the best advice because, ultimately, when you build an enterprise sales engine, the ability of the founding team to sell the product is the first proof of concept: to sell the product, and then to sell the product for a lot of money, and then to sell the product for a lot of money consistently. These are three different levels of event. Of course, I'm simplifying a bit, but it's a scale. If you can't sell the product, no one can sell the product. It doesn't matter. You have nothing to hire salespeople for. You can't do things sequentially. You can't wait until you complete the product-market fit process and say, now we've reached product-market fit, we can start building a sales team. The world doesn't work that way. You can't do things in a waterfall. But ultimately, the ability of the founding team to sell is, first of all, the most important and significant proof of the company's product-market fit. Secondly, in a space like ours, in security, it never stops. Nikesh Arora sells, George Kurtz sells, Jay Chaudhry sells. That's what you do in this business. If you're the CEO of an enterprise SaaS company, you sell. And if you're the CTO of an enterprise SaaS company, you sell all day. That's your job. Of course, you also need to continue to understand the roadmap and do the company's strategy and lead the company internally. But ultimately, the aspect of customer facing, certainly in our world of ticket enterprise sales, large deals, it's your daily bread. It's the profession.
How much of your week is sales today?
