AT&T, Accenture, Nokia Invest 23 Million in Cybersecurity Startup-Creator

February 23, 2016

Robert Hackett

With cybersecurity becoming a topic of ever-increasing visibility and importance, information security professionals ask what protection they have when they make potentially unpopular disclosures of cybersecurity issues. Though no whistleblower retaliation statute deals directly with the topic, the Sarbanes-Oxley Act will often protect cybersecurity professionals who work directly for public corporations or those corporations’ service providers. Yet further, the Dodd-Frank Act could allow information security workers to receive a whistleblower reward for reporting cybersecurity concerns to the SEC or CFTC, in some cases.

However, the relationship among cybersecurity issues, SOX, and the Dodd-Frank Act is not yet clearly defined. Accordingly, information security professionals should educate themselves about whistleblower protections. Doing so could make the difference between being protected, receiving a whistleblower reward, or suffering retaliation without recourse.

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The “foundry” is led by the former head of Israel’s NSA equivalent.

Team8, a cybersecurity startup based in Israel, said Tuesday it raised $23 million. The Series B round of financing includes investors AT&T T -0.33% , Accenture ACN -0.70% , Nokia NOK -1.78% , Japanese conglomerate Mitsui, and Singaporean government-owned Temasek.

The company raised $18 million a year ago, bringing its present fundraising total to $41 million. The latest set of financiers join existing investors Cisco CSCO -1.92% , Alcatel-Lucent ALU 2.08% , and venture capital firms Bessemer Venture Partners, Marker, and Innovation Endeavors, co-founded by Alphabet GOOG -1.50% executive chairman Eric Schmidt.

Nadav Zafrir, co-founder, CEO, and former head of Israel’s intelligence unit 8200, the country’s National Security Agency equivalent, describes his company as a cybersecurity “foundry,” meaning that its purpose is to churn out startups and founders of its own. He tells Fortune that Team8 has plans to launch five companies in five years.

“We don’t invest in cybersecurity companies,” he says. “We actually build them.”

Team8 has hired 130 people in the past year, Zafrir says. Founded in 2014, the company has already launched one company.

Illusive Networks, its sole progeny (so far), has itself raised $27 million in two rounds of funding from investors that include Team8, New Enterprise Associates, and the venture capital arm of Citi Group C -3.29% . The firm deploys “deception” technology in corporate IT environments—bogus bait like network administrator credentials, for example—in order to fool and ensnare hackers.

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