Israeli cyber security firm Pcysys eyes $1 bln valuation, new funding, says CEO

Israeli unlisted cyber security firm Pcysys could be valued at around $1 billion by the end of the year, around which time it may seek new funding to propel growth, its chief executive said on Monday.

The startup, founded in 2015, has so far raised $40 million, including from Insight Partners and Blackstone.

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Chief Executive Amitai Ratzon said the current growth trajectory meant Pcysys’ valuation could be in the range of $1 billion by the end of year. He declined to say how much it was worth today.

Ratzon also said Pcysys would decide around the fourth quarter whether to raise new funding, which would likely be in the tens of millions of dollars.

“We are not really in the business of raising money to survive. It is raising money to explore in a way that is unheard of,” he told Reuters at a cyber security trade show in Dubai.

Pcysys has developed an automated penetration testing platform, known as Pentera, that imitates hackers so companies are able to identify security flaws in their systems.

Valuations of technology companies have soared over the past year as investors bet more economic activity will become digitally automated and shift online due to the pandemic.

That has helped make it easier for technology companies to raise capital, though Ratzon said Pcysys would only raise what it needed through debt, equity or both.

And even as cash pours into the technology sector, Pcysys is not considering a stock market listing in the near term.

“We’re not looking for a fast exit, we’re not looking for fast cash. This is about building a big business,” Ratzon said.

Pcysys would focus on organic growth over the next 18 months and was already ending some quarters cash flow positive, he said.

From 2023, it would consider acquisitions to gain new technologies to supplement existing capabilities, Ratzon said.

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