These are uncertain times for certain New York tech startups. The aftershocks of WeWork’s implosion still resonate. Sleep-unicorn Casper is offering to sell the public shares at a 32% discount to its private-market valuation.
To help brighten the mood, the mayor’s office tonight is celebrating the launch of the New York Cyber Center, a 40,000-square-foot hub in SoHo from which will hopefully bloom scores of successful startups that specialize in helping protect big banks, insurers and other companies from hackers.
“It’s a big issue for all of the city’s 45 companies in the Fortune 500,” said James Patchett, chief executive of the New York City Economic Development Corp. “There is no reason New York shouldn’t be the world capital for cybersecurity because this is where the biggest customers are.”
To jump-start the burgeoning security scene the city is pitching in $30 million to a $100 million project called Cyber NYC. The multiyear push includes the startup nest in SoHo, a Global Cyber Center in Chelsea, plus partnerships with local universities and financial institutions to assist with training and hiring.
Startups seeking to set up shop in the SoHo hub will be vetted by Jerusalem Venture Partners, an Israeli firm with more than 25 years of experience seeding data-security startups. Founder Erel Margalit, who has backed a dozen Nasdaq-listed companies, said he’s looking to cultivate small firms that have generated some revenue but need support and advice to reach the next level. The goal, of course, is for a few to grow into unicorns -- startups valued at $1 billion or more.
The opportunity before startups who can devise a better cyber-mousetrap is huge. Every few months a bank or retailer reports customer data has been stolen by hackers. Election results may not be immune, nor is the phone of Jeff Bezos.
“For every hack you hear about, there are 10 you don’t,” said Margalit.
Plenty of other metropolitan areas are also promoting cybersecurity as source of employment. The University of Maryland, for instance, has trained 8,000 people in the field, Patchett said.
City officials hope that the CyberNYC project will provide a central point where big businesses can find experts offering fresh approaches to data protection and spark the creation of 10,000 jobs, or more than double the existing number. U.S. Labor Department data show the average wage for an information-security analyst in the city is $128,420.
But after venture-capital funds got irrationally exuberant about some startups, is now a good time to be investing in more? Margalit, who houses 30 portfolio companies in his firm’s SoHo space, thinks so.
“Look, there is pressure on valuations,” he said. “You need to be careful and you need to build substantive businesses. This is a good time to be making investments – patiently.”
"Scene" - Google News
February 03, 2020 at 09:00PM
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As startup scene wobbles, a cyber hub surfaces in SoHo - Crain's New York Business
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