The entrepreneur who sold to Check Point a company worth millions based on POC alone – is doing it again
The Israeli cyber startup CloudEssence, which was established only about six months ago and develops a system for securing applications in the Cloud Native environment, was acquired by the American cyber company Contrast Security. The amount of the deal has not been revealed but is estimated at several million dollars.
The development that could only happen in Corona
CloudEssence develops a system for securing applications running in the Cloud Native environment through security testing as part of the development process (DevOps). The company’s technology allows developers to write and release secure code in a simple and fast way. The company says that their system can perform static (SAST) and dynamic (DAST) tests in a completely autonomous and automatic way and allows accurate results to be obtained in just a few minutes without the need for complex installation.
CloudEssence was founded just a few months ago by three founders: Ram Yonish, former CEO and founder of Cymplify which was sold about a year ago to Checkpoint; Tal Melamed, a world-renowned application security expert, and Itai Rosenman, former director of development in Israel of the Cisco cloud security solution (formerly CloudLock).
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In conversation with Giktiim Unish says that the company was in the process of raising funds in the midst of meetings with investors, with a document of intent (Term Sheet) guaranteed from an investor, until a meeting with one of the largest insurance companies in the US led them to an exit. Unish says that CloudEssence presented a demo of the product they developed for a particular company to get feedback from it, and the leader in the field of application security in the cloud was very enthusiastic about the product – but claimed that CloudEssence was still too small and referred it to one of the vendors it works with.
The same provider was revealed as Contrast Security, “within an hour they picked up the phone and said they wanted to see what we were doing because they themselves had not been able to solve this problem”. According to Unish “the reason it came to purchase so quickly is because we settled exactly in their vision in the area where they are developing”. Hence, the road to acquisition by Contrast Security, which offered to make CloudEssence the development center in Israel, was short.
Despite this he adds: “I did not aim for an exit, but when building a new product you need to look at who your customer is – what problem you are solving and how you are doing it better than others; And also look at who is the player in the market who can acquire you, and you will know at any given moment to whom technology solves a problem. “
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Unish emphasizes that thanks to the corona the development of the product progressed at a speed that could not come from development on normal days. “What we did from the beginning is we developed working technology very quickly, living within AWS so you can very quickly show working technology and prove capability,” said Unish.
He says that there was no prior acquaintance between the three entrepreneurs as a joint military service, when Melamed met very superficially when the two worked briefly at Checkpoint after their companies were bought by her. Recall that even the story of the acquisition of Cymplify by Check Point was very unconventional, with the company being acquired for millions of dollars on a POC basis alone.
After Unish left Checkpoint, Melamed approached him and suggested that the two set up something together in the field in which the Israeli Checkmark was acquired last May for more than $ 1 billion. “After buying Checkmarks I realized that the market is boiling. I checked Tal’s background and thought there was an interesting story and an interesting person here. When he left (Checkpoint, AA) we said ‘come on, let’s do it together’ and he brought someone else with him – with me “, says Yunish.
He said the company would intentionally open an office despite the corona to feel “like a startup within a startup,” as the acquiring company is still a private company that has raised about $ 120 million since its inception in 2014.
The development and innovation center will be within WeWork in Tel Aviv and will open next month, when the company is already recruiting developers to increase it and promote the “shoulder to shoulder” development in the office. Following the acquisition, Unish will serve as Vice President of Cloud-Native in Contrast and Operations Manager in Israel. Tal Melamed will serve as senior director of Cloud-Native research and will lead the product side and Itai Rosenman will serve as senior director of Cloud-Native engineering and will lead all development activities in Israel.
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