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Steven Mnuchin told CNBC on Wednesday that his private equity firm was leading a $ 275 million investment in cybersecurity firm Cybereason in an attempt to step up the crackdown on ransomware attacks.
“This is something I have focused on for a long time and it is a major focus of our new activity,” said the former Treasury secretary in the administration of former President Donald Trump.
“We really love this company,” he added in an interview with “Squawk Box”. “It’s best-in-class technology, it has a global footprint and a great management team. “
Mnuchin’s company Liberty Strategic Capital is investing $ 200 million while Neuberger Berman and SoftBank are investing $ 75 million. Mnuchin will join Cybereason’s board of directors. The new funding follows the $ 389 million Cybereason received in previous rounds from SoftBank, Lockheed Martin, and venture capitalists CRV and Spark Capital.
“We’re going to accelerate our growth. Right now what we’re seeing is sort of massive pressure on businesses when it comes to ransomware,” said Lior Div, CEO of Cybereason, appearing with Mnuchin on “Squawk Box”. “Hackers, especially from Russia, are getting very, very aggressive and businesses need to find a way to protect themselves. We are developing a platform, an AI-powered platform, that can allow private organizations to protect themselves.
Cybereason has been protecting company assets and national security interests since 2012. It has exposed several ploys in recent years, including a high-profile breach in which hackers broke into a dozen global telecommunications companies and took taken large amounts of personal and corporate data. The Boston-based company has its roots in Israel’s strong tech start-up sector, with its 800 employees now operating in Israel, Japan, Europe and the United States.
Cybereason ranked No. 32 on this year’s CNBC Disruptor 50 list, released in May. He joined the ranks of cybersecurity companies, including the new public company SentinelOne, which was No. 4 on the list.
Mnuchin and Div expect Cybereason to eventually go public, but neither have specified a direct timeline for such a step.
“From our perspective, this is a long-term investment, so it’s something that will last a very long time, whether the company is public or private,” Mnuchin said, adding that he believed that the business could grow significantly over the next six months. “I’m pretty indifferent when they do the IPO. We’ll do it at the right time. But the goal right now is to use the capital, grow the business, and focus on the customers.”
Cybereason reported roughly $ 120 million in annual recurring revenue at the end of last year, Div told CNBC in May. In 2019, the company had raised $ 200 million from SoftBank and its affiliates for a valuation of around $ 1 billion.
During his tenure as Secretary of the Treasury from 2017 to 2021 in the Trump administration, Mnuchin publicly prioritized issues related to cybersecurity, particularly in the financial sector. Reported global ransomware attacks increased 485% in 2020 from the previous year, according to Romanian cybersecurity company Bitdefender. Recent notable incidents, such as hacks involving Colonial Pipeline and IT company Kaseya, have heightened concerns about the issue.
Mnuchin said he hopes regulations around ransomware, especially cryptocurrencies such as bitcoin, will continue to ensure “full transparency” in digital payments. The first priority should be cracking down on ransomware payments, he said, adding that companies should be required to obtain licenses from the Treasury before making payments.
“I think it’s one of the few industries that got a head start and really started spending money very early on,” he said. “This is an area in which people need to continue to invest, and from my perspective, technology to support national security is one of our top priorities.”
Mnuchin launched Washington, DC-based Liberty Strategic Capital earlier this year after his tenure as Secretary of the Treasury ended. He was a Hollywood financier before he came to government, helping to fund James Cameron’s “Avatar”, among other blockbusters. He is a former Goldman Sachs executive.
Correction: Steven Mnuchin told CNBC his private equity firm was leading a $ 275 million investment in cybersecurity firm Cybereason. Headlines from an earlier version distorted the number.
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