Israeli cybersecurity firm Check Point Software CEO Gil Shwed said his firm is taking a cautious approach toward M&A due to fears of a bubble. Shwed said most startups have an unclear path to profitability and require "10 or 20 years of perfect execution" to justify their current valuations.
- Cybersecurity startups have raised $17.7B globally as of Oct. 11, a 74% increase from last year, according to PitchBook.
- Tel Aviv-based startups account for 36% of the funding.
- Check Point generates annual revenues of $2.1B, and Shwed said it would be difficult to justify spending hundreds of millions on companies that would make a minimal contribution to its revenue.
- It currently has a $4B cash pile and recorded profits of $843M last year.
- Check Point acquired Israeli cloud email security firm Avanan for $270M in August.