Gili Raanan of Sequoia launches Cyberstarts, a $50M fund focused on cybersecurity which is world’s first VC that is mostly backed by cyber entrepreneurs

Shlomo Kramer, Nir Zuk, Marius Nacht, Mickey Boodaei and Amichai Shulman are among the entrepreneurs backing the fund, which will invest in 10 cybersecurity companies at their formation stages

Gili Raanan, General Partner at Sequoia Capital (Israel) since 2009 is launching a new venture capital fund named Cyberstarts.

The fund received a $50M funding in a very short time, mostly from successful cybersecurity entrepreneurs who have built cybersecurity companies at an aggregate value of $40B. Among the investors in the new fund are Shlomo Kramer and Marius Nacht, two of the co-founders of Check PointAmichai Shulman, co-founder of ImpervaMickey Boodaei and Rakesh Loonkar, two of the founders of Trusteer, acquired by IBMNir Zuk, the founder of Palo Alto Networks; and Assaf Rappaport, one of the founders of Adallom, acquired by MicrosoftSequoia Capital is also an investor in the fund.

The fund recruited 10 top cybersecurity executives

The fund’s unique model is introducing a fresh approach for pre-investment decision making process and post-investment portfolio services. The combination of Gili Raanan as sole GP, alongside a large number of experienced cyber entrepreneurs, enables the rapid identification of special teams who solve major pain points for promising markets. The post-investment support by the investing entrepreneurs is designed to take portfolio companies all the way from inception to the delivery of market-ready products.

The fund recruited 10 US based CISOs (chief information security officers). The CISOs will support the decision making process and will help the portfolio companies reach product/market fit. Among the chief information security officers joining are Jim Routh of Aetna InsuranceStephen Ward of the financial services company TIAA; and Stu Solomon, a senior vice-president at Optiv, a provider of information security products.  The advisory is chaired by Jason Clark who previously was Chief Strategy and Innovation officer at Optiv.

Gili Raanan, Cyberstarts founder says: “We aspire to become the leading cybersecurity venture fund. The investing entrepreneurs and I bring together cybersecurity domain expertise, and a broad network of customers and go-to-market teams. The fund is a platform for identifying the best entrepreneurs and help them solve the next big problems of the cybersecurity world. With a list of investors that speaks for itself, this is a unique breakthrough that gathers the best brains in cybersecurity to work together.”

Raanan will continue to manage the existing portfolio of Sequoia Israel. Raanan has been working in the fields of cybersecurity and software for more than 20 years. He founded and managed companies including nLayers, which was acquired by EMC, and Sanctum, which was acquired by IBM. Since 2009, he has been a general partner at Sequoia Capital in Israel, where he sat on the boards of Adallom, which was acquired by Microsoft, and Onavo and Snaptu, both of which were acquired by Facebook. He is a member of the board of directors at six growing companies.

Gili Raanan: “I found myself surrounded by people who invest in the fund not just their money, but also their tremendous commitment, passion, experience and expertise”

The idea of establishing a fund based on experienced cyber entrepreneurs emerged during conversations with successful cybersecurity entrepreneurs who were very interested in being part of such an initiative. “I was pleasantly surprised by the entrepreneurs’ fantastic response. I found myself surrounded by people who invest in the fund not just their money, but mostly their tremendous commitment, passion, experience, and expertise,” he says.

“I held many discussions about how we want to invest, how we can offer the best service to entrepreneurs based on our experience, and how we can identify ground-breaking cybersecurity technologies of tomorrow. A platform made up of experienced entrepreneurs who work together to invest in the next generation of entrepreneurs is a significant development. We will be the world’s first fund that is backed mostly by cybersecurity entrepreneurs. We are interested specifically in investing in cybersecurity companies that are just setting out and have not yet raised any meaningful investment. Our investment methodology will be based on analyzing the market’s needs and carrying out focused execution.”

Shlomo Kramer, the co-founder of Check Point, Imperva, and Cato Network is one of the fund’s investors: “I’m a big fan of Gili Raanan and believe in Cyberstarts’ innovative model. I think that Gili’s experience and domain expertise, added to the capabilities we bring as investors with vast experience in establishing companies and building innovative products, will help younger entrepreneurs build amazing companies.”

Mickey Boodaei, the co-founder of Imperva, Trusteer, and Transmit is one of the fund’s investors: “The cybersecurity world is driven by rapid changes in businesses and technology – these continuous disruptions innovative and creative defenses. In order to respond rapidly to the market’s needs, you must have deep understanding of the field, and this is a major advantage that our fund offers. Cyberstarts will focus on cyber defense and identifying talents that provide solutions for these markets.”

Assaf Rapoport, the co-founder of Adallom is one of the fund’s investors: “Gili mentored Adallom from the early days and helped us in the process of defining the product and sharpening the solution and value-proposition until the sale of the company. I invested in the fund to help new generation of entrepreneurs receive the best mentoring and support from the dream team of the Israeli cybersecurity market.”

Amichai Shulman, the co-founder of Imperva: “Israel is a unique eco-system for cyber security companies where successful first generation entrepreneurs helped fund and establish the second generation of successful companies which in term are now further funding a the third generation of companies. Cyberstarts is the epitome of this process and maximizes the symbiotic relationship between young and talented entrepreneurs and successful industry veterans.”