Israel slams down NIS 100M for KIDMA 2.0 cybersecurity program

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Israel’s national cybersecurity program, KIDMA, will get a refresh soon, several of the country’s national agencies and ministries announced on Monday. A consortium of agencies will invest over NIS 100 million into KIDMA 2.0. Investors include the National Cyber Bureau, the Israeli Ministry of Economy and the Office of the Chief Scientist (OCS). The news likely will be played up at the country’s annual cybersecurity conference, CyberTech Israel, in Tel Aviv from January 26-27.

“In view of the great success of the KIDMA program, we are continuing with a new program that will answer the changing needs of the country’s thriving cyber industry,” said Israeli Chief Scientist Avi Hasson. “The importance of maintaining the Israeli cyber industry’s leadership position internationally is only growing, and as such we need to promote new and unique technologies in a creative way.”

Phase I of KIDMA came to an end in June this year, a joint press release stated, while Phase II will tackle “challenges with a restructured program and a new set of support tools for the Israeli cyber industry.”

The initial program was budgeted to NIS 80 million, which grew to NIS 100 million but ended up paying out NIS 136 million thanks to extra grants from the OCS. The average size of the grants was NIS 3 million while approving 91 funding applications out of 125 submitted between January 2013 and June 2015. Most of the funds were matched, as KIDMA credits 11 unnamed incubators with providing about NIS 2.3 million per project (total funds for those 91 companies amounted to about NIS 270 million). Optimistically, KIDMA claims 65% of the companies it funded are already reaching sales in excess of $1 million.

“Now we must move on to the next stage: long-term projects, connecting companies to clients, connecting Israeli firms with international companies and distributing budgets effectively,” Hasson added.

Beersheva, a cyber oasis

Cyberspark, a joint coordinating initiative for cyber projects co-launched by the Israeli National Cyber Bureau, runs a pavilion at an event in 2014 (Photo credit: Dani Machlis/Ben Gurion University)
Cyberspark, a joint coordinating initiative for cyber projects co-launched by the Israeli National Cyber Bureau, runs a pavilion at CyberTech Israel 2014 (Photo credit: Dani Machlis/Ben Gurion University)

A number of public-private initiatives have strategically aimed at making the southern city of Beersheva the country’s cyber hub. The National Cyber Bureau in 2014 launched the Cyberspark innovation initiative —  coordinating body for joint cyber research — in conjunction with Ben Gurion University of the Negev, EMC2-RSA, Jerusalem Venture Partners (JVP) and Lockheed Martin. The National Cyber Bureau has put NIS 48 million toward research funds and scholarships in partnership with the Israeli Ministry of Science and Technology, plus the Magshimim Leumit honors program for high school students.

JVP also maintains its Cyber Labs incubator in the city and another cyber R&D initiative, Masad, receives governmental support. Two companies that have been located in the JVP incubator include recently exited and recently funded MorphiSec ($7 million in Series A funding) and Teridion ($15 million in Series B funding), plus SecBI, CoroNet and SCADAfence. Recent JVP exits by CyberArk (which went public in 2014 and acquired Israeli companies CYBERTINEL and Viewfinity) and CyActive (which was sold to PayPal for somewhere between $60-80 million) have also enhanced Israel’s stellar reputation for cybersecurity.

“Over the past few years, there has also been a trend of Israeli companies scaling up . . . in fact, more than a quarter of the exits in the field over the past three years were by Israeli companies,” remarked Dr. Eviatar Matanaia of Israel’s National Cyber Bureau.

The KIDMA 2.0 plan aims to provide larger grants for up to four years for individual companies through the MAGNET program, smoothing the process between proof of concept and beta testing. Most ambitious of all, it will also create consortia of companies to mutually research specific problems in given industries.

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