Cybersecurity Gets Smarter: How AI is Changing the Game

Ziv Conen of New Era Capital Partners on why AI-driven solutions are the future of digital defense

Left to right: Gideon Argov, Shira Gershon, Eugenio Sabbadini, Ayelet Frish, Ran Simha, Danny Mann, Ziv Conen.  (photo credit: SIVAN FARAG)
Left to right: Gideon Argov, Shira Gershon, Eugenio Sabbadini, Ayelet Frish, Ran Simha, Danny Mann, Ziv Conen.
(photo credit: SIVAN FARAG)

AI transformation has taken over “digital transformation” in every part of society and industries. Think automating bus and transportation schedules; threat intelligence for fraud detection and supply chain management; and social media intelligence for brands and governments.

In a sea of investors, Tel Aviv-based New Era Capital Partners invests in solutions to take typically outdated industries and bring them into the AI-driven world. “One of the central themes of our funds,” says Partner Ziv Conen,“ is taking outdated manual workflows, vertical workflows, and bringing them to the digital world.”

New Era Capital Partners, which was founded in 2017, focuses on early-stage investments in Israeli or Israeli-founded start-ups that use breakthrough technologies, emphasizing artificial intelligence and machine learning. In a recent interview with this writer, Conen outlined the activities of New Era’s Fund III, which will be closing this June, and its growing emphasis on cybersecurity investments that automate processes using AI.

New Era’s latest fund began shortly after the outbreak of the Swords of Iron War in October 2023, and its first close was in December of that year. Conen says that while some investors were initially hesitant about investing in Israeli firms at that time due to the uncertainty caused by the war, others saw it as an opportunity. “We found a lot of investors – both high net worth individuals and some institutional investors – who not only care about Israel but also recognize the unique opportunity this moment presents. With some global investors pulling back, valuations in Israel are more attractive, creating a phenomenal entry point for those who understand the long-term potential of Israeli innovation.”

Conen explains that New Era is not wedded to any one specific area of investment. “We are an industry-agnostic fund,” he declares. “We don’t invest in industries that we don’t understand or don’t think that we have a value-add, such as medical devices or biotech. We invest a lot in cybersecurity, fintech, HR tech, developer tools, and smart mobility. We look for differentiating technology in almost all of our investments.”

Differentiating technology, explains Conen, means that the companies in which New Era invests possess a unique type of process or technology that gives them an edge over their competitors. “It could be they have proprietary data, or it could be that they have a patent of a technological breakthrough.” More often than not, he adds, these differentiators have been in AI or machine learning.

While New Era’s Fund III invests in several high-tech areas, cybersecurity is a growing field of interest. Conen, who has been with the firm since its creation, is uniquely qualified in cybersecurity. He led technological, intelligence, and operational teams in the IDF’s elite Unit 8200, received his master’s degree at MIT, and was an associate partner at McKinsey & Company, where he led technological transformations for Fortune 500 clients.

“Cybertechnology is of great significance today,” he explains, “because it is essential to protect business environments and critical data. The landscape is evolving quickly, so cybersecurity as a domain needs to evolve quickly.” For New Era Capital Partners, “cybersecurity investments are a growing interest since Fund II and will continue to be a focus,” Conen notes.

Google’s purchase of an Israeli cloud security platform for $32 billion in early March, he adds, further validates the significance and value of cybersecurity platforms. “We at New Era really believed and understood the value of cyber beforehand, and I think that Google’s acquisition of Wiz reaffirms this. I’m very happy for the founders of Wiz and all the investors in Wiz, and it gives a substantial tailwind to the whole cybersecurity industry in Israel, especially in these times.”

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Recalling his years of experience in the IDF, he explains why cybersecurity is so critical today, “For years, cybersecurity has been a cat-and-mouse game between attackers and defenders: the attacker only needs to find one attack path, while the defender must secure every possible entry.” Today, he explains, AI is playing a major role across the entire attack chain—from discovery, research, and weaponization through payload delivery, exploitation, and installation, and ultimately, to command and control. Those who are defending against security intrusions, he points out, must also harness AI to detect, respond, and stay ahead of evolving threats.

“AI is a huge component of the attack value chain. Because AI has accelerated the attack value chain so much,” says Conen, “the defenders now need to use AI to defend these rapidly evolving threats.”

From an investment point of view, he explains, that opens the door to categories that replace manual work and defense against cyberattacks with agentic AI, which uses sophisticated reasoning and iterative planning to solve complex, multi-step problems autonomously. Conen highlights two recent investments from New Era Fund III: Cytrix, an agentic AI continuous pentesting platform, and Overwatch, a threat intelligence platform, leveraging Agentic AI to hunt cyber and fraud threats across the dark web and closed hacker forums. Omer Shirazi, Cytrix’s CEO, adds: “In a very short time span, our AI agents will continuously conduct a full parameter detection, scan 99.9% of our customer’s applicative assets, and enhance our customer’s internal Red Team – all processes that would have taken weeks to months manually.” Conen also highlights Hopper Security, which recently came out of stealth and targets Open Source Security, a growing need with the sharp rise of AI-generated Open Source.

A second reason why defending against cyberattacks is so important today, he adds, is because of the exposure to hackers caused by working remotely in the cloud that increased during COVID. Placing applications and data in the cloud made information more accessible but left them more exposed and sometimes in perimeter-less environments. From an investment point of view, he explains, this opens the door to investing in new cloud-native solutions that enter well-established categories with existing on-prem solutions. Under this thesis, Conen highlights Apono, a Cloud-Native Access Governance Platform. Rom Carmel, CEO of Apono, adds: “Leveraging our cloud-native solution, we reduced the attack surface of our customers by 98%, while simultaneously enabling thousands of their employees just-in-time and just-enough access.”

These two trends – the need to use AI in cybersecurity and the increased use of the cloud for remote work – are major reasons why the cybersecurity domain is growing so quickly. In 2024, Israeli cybersecurity garnered $4 billion in investments, and the global cybersecurity market was valued at ~$200 billion. Conen says that the cybersecurity market is expected to grow at a compound annual growth rate of 13-15% for the next decade, according to multiple research firms.

Defending against cyberattacks is important for national security, but it is equally essential for financial institutions (e.g., banks, insurance providers) and healthcare providers and payors. All of these hold a great deal of sensitive personal information about their clients, including details of their finances and sensitive medical data. “All industries, from the most sophisticated and well-guarded ones, such as military and defense installations, all the way to more basic industries, are prone to cyber-attacks,” says Conen. The good news is that with the rapid advancement of Israeli cybersecurity technologies—especially those powered by AI—we are entering a new era of proactive defense. Conen concludes, “By staying ahead of the threat landscape, organizations have a real opportunity to build resilience, earn trust, and turn security into a strategic advantage.”

This article was written in cooperation with New Era Capital Partners.