Steven Mnuchin told CNBC on Wednesday that his private equity firm is leading a $ 275 million investment in cybersecurity firm Cybereason to step up crackdown on ransomware attacks.
“This is something that I’ve been focusing on for a long time and is an important focus of our new business,” said the former Treasury Secretary in the administration of former President Donald Trump.
“We really like this company,” he added in a Squawk Box interview. “It’s the best technology in its class, it has a global presence and a great management team.”
Mnuchin’s firm 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 capital firms CRV and Spark Capital.
“We will accelerate our growth. What we are currently seeing is some kind of massive pressure on companies when it comes to ransomware, ”Cybereason CEO Lior Div said with Mnuchin on Squawk Box. “Hackers, especially from Russia, are becoming very, very aggressive and companies have to find a way to protect themselves. We are developing a platform, an AI-based platform, that can enable private organizations to protect themselves.”
Cybereason has been protecting corporate assets and national security interests since 2012. It has uncovered multiple schemes in the past few years, including a high profile security breach in which hackers broke into a dozen global telecommunications companies and stole large amounts of personal and corporate data. The Boston-based company has its roots in Israel’s strong technology start-up sector and now has 800 employees in Israel, Japan, Europe and the USA
Cybereason was ranked 32nd that year on CNBC Disruptor 50 list, which was released in May. It joins the ranks of cybersecurity companies, including the newly floated SentinelOne which was number 4 on the list.
Mnuchin and Div expect to eventually bring Cybereason to the public, but none of them have given a direct timeline for such a move.
“From our point of view, this is a long-term investment, something that will last a very long time, whether public or private,” said Mnuchin, adding that the company can grow significantly over the next six months. “I don’t really care if they go public. We’ll do it when the time is right. But the focus now is on leveraging the capital, growing the business, and focusing on the customers.”
Cybereason took home around $ 120 million in annual recurring revenue late last year, Div told CNBC in May. In 2019, the company had raised $ 200 million from SoftBank and its affiliates with a valuation of around $ 1 billion.
During his tenure as Treasury Secretary in the Trump administration from 2017 to 2021, Mnuchin publicly prioritized cybersecurity issues, particularly in the financial sector. According to Romanian cybersecurity company Bitdefender, reported global ransomware attacks increased 485% in 2020 compared to the previous year. Notable recent incidents – such as hacks involving Colonial Pipeline and IT firm Kaseya – have heightened concerns about the problem.
Mnuchin said he hopes that regulations surrounding ransomware, especially for cryptocurrencies like Bitcoin, continue to ensure “complete transparency” in digital payments. The first priority should be fighting ransomware payments, he said, adding that companies should be required to obtain licenses from the Treasury Department before making the payments.
“I believe this is one of the few sectors that have been ahead of the curve and started spending really early,” he said. “This is an area that people need to keep investing in and, in my view, national security technology is one of our top priorities.”
Mnuchin founded Liberty Strategic Capital, based in Washington, DC, earlier this year after his tenure as Treasury Secretary ended. Prior to his reign, he was a Hollywood financier and helped finance James Cameron’s “Avatar”, among other things. He was a former executive at Goldman Sachs.