"It's time for a company like Check Point to reach a value of $100 billion"

"I chose the name of the fund after one of the first cyber attacks that the Chinese government conducted against the United States in 2011," says Dave DeWalt, who heads the NightDragon investment fund, which has $750 million under management.

DeWalt, who recently visited Israel, is considered to be one of the leaders of the global cyber industry and in the past served as the CEO of the likes of McAfee and FireEye. After 22 years in management positions, he founded the investment fund, which, among other things, is invested in several Israeli cyber companies, some of them in cooperation with Team8.

One of the most respected managers in DeWalt's eyes is Gil Shwed, CEO and co-founder of Check Point. "Gil has been managing the company for over 30 years with impressive success," he says. "I managed companies for 22 years and I couldn't do it anymore.

"Gil must understand that now is the time for Check Point to become a cyber company with a value of $100 billion. Until now there were no such companies in the world, but the next two years will probably be the period when the big cyber companies, and not only them, will go on an acquisition spree of technologies and businesses," he adds.

According to him, "Check Point is very conservative, but you can now purchase good companies at excellent prices. There are other companies that could do the same and I believe that some of them may surprise us like Snyk, Wiz, Palo Alto or CrowdStrike.

"In a period of growth and prosperity, it is easier for small and young companies to recruit customers and develop. However, when the world suffers from a recession, large organizations will prefer to purchase mainly cyber services from the large companies. We will see a lot of acquisitions and mergers in the cyber industry and far less investment in companies."

DeWalt adds that "this will be the first time we see a decrease in investments in cyber companies and most large companies will look to acquire small companies, especially in the second half of 2023."

Despite the consolidation in the market, the cyber field continues to be hot according to him. "We are still in a time of many conflicts in the world - Russia, Ukraine, the Middle East, China and Taiwan and North Korea - and as long as they exist, the attacks multiply, cyber thrives and drives innovation."

One of the complaints heard about the cyber companies, according to DeWalt, is how similar they often are. "In every field there are quite a few companies that to the unprofessional eye look the same, but the technological field is a field of very small differences." In his opinion, the development of a company is tested by "running long distances and what differentiates the companies is found in several points: the ability of a company to sell the products, the capital in its coffers, the ability to distribute, and the level of execution.

"An example of this is FireEye, one of the leading cyber companies in the world. The founders of the company came from Pakistan, where the development center was also located. The problem was that its five competitors also had good and similar technology. What decided the competition was the level of execution - the ability to use a product in a short period of time and sell it to many, many customers quickly and efficiently. This is what finally increased the value of the company from $10 million to a billion dollars in four years."

According to DeWalt, there are currently 7,000 cyber companies in the world and this is undoubtedly far beyond the existing demand. "It's a Darwinist cyber bubble. Whoever survives will be whoever succeeds in the coming year, even though it's not certain that it's only a one-year crisis."

DeWalt is involved in quite a few companies in Israel. "The community here is small and very close to each other and there is a good cyber atmosphere here," he says. "I strongly believe in Claroty, which can be very large in the industrial field. I was on the board of Illusive, which was recently sold (to Proofpoint for $100 million, MA), and I was also involved in Forsecout (which was sold for $1.9 billion in 2020). I will invest a lot in the field in the coming year. This is a period when I need to invest and I will make many more investments, mainly in advanced stages of companies - B and later. I invest closely with Team8 in companies that bring in at least $10 million."

Dave DeWalt

Position: Managing Director & Founder, NightDragon

Education: PhD in computer science from University of Delaware

Previous positions: Former CEO of McAfee, FireEye, and Documentum

One more thing: Loves golf and travels around the world