TheMarker, December 22, 2004
Cyota completes $7.25 million funding round, led by Bessemer Venture Partners
|Israeli company Cyota, providers of security solutions and bank fraud prevention, has completed fundraising of $7.25 million. The funding round was led by Bessemer Venture Partners, which is investing in the company for the first time, and was joined by Israeli funds Israel Seed Partners, Giza Venture Capital and Poalim Ventures.
Cyota will use the funds raised to increase the speed of the company’s development of international bank fraud prevention products. Following the investment David Cowan, a Bessemer Venture general partner and co-founder of Verisign, will join Cyota’s board.
“Nine months ago we decided to look for one company who could bring security back to the internet,” said Cowan. “We surveyed the whole market, and were pleased to find the one company – Cyota – with leading technology, a range of suitable solutions, and talented management which will remove the threat over financial activity on the internet.”
Cyota, which was founded in 1999, has recently been concentrating on developing solutions and services to counter the phenomenon of phishing. Phishing is a form of junk mail (spam) which leads surfers to sites and asks them for sensitive information such as a passport, ID number or bank account number, under the assumed identity of a reputable company seeking to update details on a pre-existing account. The data is harvested and later used to enter the actual service, and then to the transfer of funds out of the account, or other types of fraud.
According to a market survey conducted by Gartner in June 2004, the scale of fraud by means of phishing has reached $2.4 billion annually, and the average fraud per account is around $1,200.
With the completion of this funding round total investments reach around $30 million. Among Cyota’s shareholders are Toshiba, Bank Dresdner, RRE, Cowan Ventures and private investors.
Cyota numbers among its clients 8 of the 12 biggest banks in the world, among them Bank of America and Bank One in the U.S. , Credit Sezuan and UFJ in Japan and Isracard, Leumi Card and American Express in Israel. The company’s annual revenues are estimated at over $10 million, and it generates a profit. Cyota was selected last week by the newspaper Haaretz as most promising company for 2005 in the category for “Software and Data Protection”.