The Israeli team that led cyber company Kiteworks to a $1B valuation and $456M funding round
The Israeli team that led cyber company Kiteworks to a $1B valuation and $456M funding round
Less than $100 million of the current fundraising will go into the company, with the remainder being used to buy out veteran investors, making room for Insight Partners and Sixth Street Growth.
American company Kiteworks, which features a strong Israeli management team, raised $456 million in a funding round, most of which in secondary deals aimed at buying out the holdings of the company's long-time investors. The new round was led by Insight Partners, known for its significant investments in Israeli and Israel-related companies, and Sixth Street Growth.
Kiteworks provides Private Content Network (PCN) software that allows for the secure sending, receiving, sharing, and storage of sensitive or private data while meeting the world's strictest data security and regulatory requirements. This applies to all of an organization's communication channels with third parties, regardless of the data transmission method: email, file sharing and collaboration, automation and machine-to-machine communication, database storage, API communication, and online forms.
In addition to top-tier data security, the company offers organizations the ability to control data flow at an individual level according to the organization's policies and the sensitivity of the data, as well as detailed reports demonstrating compliance with major regulatory bodies in the USA, the European Union, the United Kingdom, Australia, and many other countries.
The company was established in 1999 in Singapore, became an American company in 2001, and initially developed well in the field of file sharing. However, at a certain point, it began to falter, experiencing low single-digit growth while burning cash as a loss-making entity.
In 2016, one of the company's investors appointed Jonathan (Yoni) Yaron, an Israeli with a background in the elite 8200 unit and a successful track record of founding and selling companies, to the board of directors. Yoni was tasked with analyzing the company's situation. He realized that the company had significant unrealized potential and proposed a vision to change direction, focusing on the security of sensitive data and maintaining compliance and privacy. The company's investors supported his vision and action plan, appointing him as chairman and shortly thereafter as CEO to implement the vision and bring the plan to fruition. Yoni recruited a new management team and transformed the company from a loss-making entity with minimal growth into a rapidly growing and highly profitable company.
Yoni brought in a strong and experienced Israeli team that greatly contributed to the company's success, including Yaron Galant, an 8200 graduate and the inventor of the Web Application Firewall (WAF), who was appointed Chief Product Officer and played a central role in shaping and realizing the product's focus on data security and compliance. Later, Amit Toran, also an 8200 alumnus, joined as Senior Vice President, Corporate and Business Development, building and implementing the company's inorganic growth strategy (mergers and acquisitions). Many other Israelis were recruited to key positions. Despite the Israeli dominance, the company remains very diverse in terms of employee backgrounds.
Kiteworks has over 3,600 clients worldwide, including most governments in the Western world, about 25% of the 100 largest banks, about 40% of the 100 largest law firms globally, and over 50% of the 20 largest pharmaceutical companies in the world. Its clients include organizations and companies such as the U.S. Securities and Exchange Commission (SEC), Pfizer, Harvard, KPMG, NHS, Target, Honda, Shell, Latham & Watkins, as well as prominent Israeli clients, including major banks, HMOs, insurance and credit companies, security firms, leading cyber companies, and other significant players in the economy.
Under Yoni's management, the company achieved an ARR (Annual Recurring Revenue) of $130 million and has been extremely profitable for five consecutive years. Additionally, the company, led by Toren, has acquired four companies (in Switzerland, Germany, and the UK), three of them last year, and is expected to complete additional acquisitions this year and in the coming years as a central part of its growth strategy. The company is actively looking for acquisition opportunities in Israel, with a special interest in strong Israeli teams with high technological capabilities and deep expertise in the company's fields of activity.
In a conversation with Calcalist, Amit Toren mentioned that less than $100 million of the current fundraising will go into the company, with the remainder being used to buy out veteran investors, making room for Insight Partners and Sixth Street to come on board. "We are continuing our non-organic growth strategy and are actively looking to acquire a company in Israel that aligns with our field of activity," he said.
Jonathan Yaron, CEO and Chairman of Kiteworks, stated, “This minority stake investment affirms Kiteworks’ role in providing a revolutionary solution to the world’s growing challenge of tracking and controlling sensitive data in motion and use. With recent groundbreaking innovations such as Next-Gen Digital Rights Management, combined with the growing industry and regulatory focus on tracking and controlling the data layer, the road to realizing our vision has never been clearer. We’re excited to accelerate our growth and continue innovating to meet the evolving needs of our customers with the support of Insight Partners and Sixth Street Growth.”
