Fighting on the ground is a very visible element of the war in Ukraine. The hybrid war is another, less visible campaign being  fought over the internet.

In modern warfare, a power plant can be put out of commission with a cyber attack as well as a precision guided missile, making defending assets from hacker attacks a pressing priority. For Israeli entrepreneur Shira Kaplan and her exclusive club of cyber investors, that presents an opportunity. 

For example, when Russia launched its attack on Ukraine, wind turbines across Europe went out of control after the satellite controlling them failed. It was apparently the same one used by the Ukrainian military for their communications, according to an article in Germany’s «Handelsblatt» (behind paywall, in German). Coincidence?

There is also, of course, the «usual» cybercrime. Internet crimes committed in Switzerland increased by 24 percent last year to more than 30,000 cases, the Federal Statistics Office announced Monday. 

Crime Pays

From a business standpoint, it is an ideal time for companies specializing in defending against hackers and for investors betting on the sector. 

Shira Kaplan, an Israeli entrepreneur and former Israel Defense Force (IDF) analyst based in Zurich. Together with backers, her company Cyverse is bringing together start-ups in Israel and large companies in Switzerland. Indeed, Israel is a global hub for cyber expertise where IDF defense specialists often found start-ups after they are demobilized.

Cyber Club

The contacts Kaplan has made formed the basis for Cyverse Capital, with several million Swiss francs already having been invested, she told finews.ch. Among its clients, the firm counts board members and company heads, digital officers and IT security chiefs and well known bankers. She, however, declined to reveal investor names.

Swiss Caché

Kaplan goes out of her way to tell companies in Israel that the backers come from Switzerland and contacts in the Swiss business community are highly coveted. She explains that while American internet behemoths are very active in acquisitions, the Swiss and «German-speaking Europe are heavily underrepresented at the Israeli cyber hub.»

«We actually only get access because we have a connection to the startups very early on as part of our intermediary activities,» Kaplan says, referring to the investor race. Kaplan has invested in a dozen or so startups over the past four years with names like Fireblocks, Lightspin, Zero Networks and Zecops. There are plans afoot to formalize the investments in a separate fund.

 Return Multiples

With the rapidly increasing importance of cybersecurity, «you had to be very unlucky to lose money with an Israeli cyber startup in recent years,» she observed. When these companies are sold, it is not a question what the «multiple» is, but whether it is single- or double digit.

Demand for cyber-defense expertise is not likely to fade over the next few years. «Hackers are always one step ahead of us. Strictly speaking, our industry's job is to hand out band-aids for attacks that have occurred.» Unfortunately, there is unlikely to be a shortage of these in the future.