After one of the weakest months in recent years in Israeli high-tech, the month of August opened with a mega-raising making us feel like we are back in 2021: the Israeli startup Talon CyberSecurity announced last week (Thursday) the completion of a huge Series A fundraising round of $100 million led by Evolution Equity Partners. The round also included participation from Ballistic Ventures, CrowdStrike's Falcon Fund, Merlin Ventures, SYN, Lightspeed Ventures, Sorenson Ventures and Team8.
From the biggest seed round yet to a monstrous A round
Talon is a startup that knows how to raise the big bucks. In 2021, at only two months old, it announced the completion of a seed round in the amount of $26 million, which made it the highest seed fundraising round in the history of Israeli high-tech .
At the beginning of 2022, the startup announced the expansion of that round with an additional $43 million, but shortly thereafter it was announced that it was a SAFE (simple agreement for future equity) investment of ‘only’ $17 million dollars. So, to date, the company has actually raised $126 million dollars. The current fundraising (which includes the SAFE investment) comes at the heart of a rough market period when both old and new startups have been having difficulty raising new funds. But somehow Talon managed to do it again.
The corporate browser is becoming secure
Talon develops a browser that is not intended for everyone, but rather for users in corporate organizations. Instead of using Chrome, Edge, Safari, or Firefox, Talon wants you to switch to TalonWork, which is based on Chromium (the open-source browser project that Google leads). The browser can work on private computers, corporate computers and the computers of contractors and outsourced employees and is able to protect against vulnerabilities found on the user's device. It also protects against weaknesses and vulnerabilities in the browser itself and in the user's work environment.
In other words, TalonWork creates a kind of sterile environment inside the employee's operating system, so that all their corporate uses are protected, while their personal uses can be done in the standard browsers. Initially, Talon launched its product with PC and Mac versions, but a month ago it launched an Android version as well and plans to launch an iOS version in the near future.
Behind Talon stand two well-known veteran entrepreneurs in the Israeli cyber scene: Ofer Ben-Noon (CEO) who founded the automotive cyber company Argus in 2013, which was sold 4 years later to the German Continental for approximately $430 million; and Ohad Bobrov (CTO), who founded a mobile cyber company Lacoon in 2011, and also sold it after 4 years to Check Point for $100 million. Today, Talon employs 75 people, most of them in the company's research and development center in Israel and the rest in the United States.
Browsers are the new bonanza of Israeli high-tech
In a conversation with Geektime, Ben-Noon explained that the current recruitment does not make the company a unicorn: "It is not correct to be dubbed a unicorn at this stage.” He added that making this distinction is to “protect the company, the employees who join us after the recruitment and the investors. We believe that it is necessary to recruit according to a value that we can grow to in terms of ARR, otherwise, it is risky for new employees to join the company that could potentially plateau or even decline in value later on.” According to Ben-Noon, a healthy company is one with a realistic value, which can be reached before the next fundraising round.
Ben-Noon continued, saying that it is indeed a challenging time for raising money and that investors are more critical and examine the company's performance deeper, but adds that this is completely justified: "When we saw the negative shift in the markets, we started recruiting funds. Not because we lacked capital, but to reflect financial security to our employees and customers. But it was the business and product progress that made the recruitment possible. We didn't need the money, but the fact that we have it makes everyone more comfortable as it represents stability in an otherwise unstable environment. It also allows us to be more opportunistic for additional products, increase the pace of hiring employees, and respond to the market faster while we look ahead.”
Shortly after launching, Talon found itself going head-to-head with another Israeli startup, Island, founded by Dan Amiga (CTO) and Mike Fey (CEO). It seems that every time one of them recruited funds or launched a new product, the other was following right behind. And both companies develop a secure browser for organizations. "We are happy about the competition," claims Ben-Noon. "A market where there is competition is a healthy market that has demand and customers. We are happy to see that other companies have emerged after us as it helps with validation. In addition, as the pioneers of a new category, we think that customers feel more comfortable with a new product concept, and see its value more clearly, when it is presented by several players at the same time.”
Although he refused to get into comparisons, Ben-Noon claims that Talon's strong momentum shows their technological advantage. He points out that Talon won the Most Innovative Startup award at the RSA conference held in June, and that the company's investors and integrations with "leading companies in the field of cyber security" all testify that Talon has the upper hand. I wonder what Island would say about that.
While the Talon-Island war goes on, another Israeli startup, Perception Point, also presents a similar solution, but it does not require a dedicated corporate browser to protect the organization, but rather allows employees to continue using their normal browser without posing a danger to the organization. When I asked Ben-Noon about this approach he said that any solution that relies on the user's existing browser cannot provide the same level of security as Talon. In addition, he claims that Talon's browser enables the fastest response time to new vulnerabilities. "Using TalonWork provides the same user experience as browsing in Chrome, which is the most popular browser on the market today. We receive very positive responses from our users who are used to struggling with complex security solutions that slow down their work and make it complex and inefficient.” Who knew browsers could be such a hot field?