Slide 1: Discover. Innovation
DISCOVER. INNOVATION
Slide 2: Disclaimer
This presentation is for information purposes only. By this presentation, Elron does not intend to solicit offers to purchase its securities and the presentation does not constitute an invitation to receive such offers. Elron may make improvements and/or changes in the features or content presented
Slide 3: Discover. Elron
DISCOVER. ELRON
Slide 4: Experience identifying opportunities and building technology leaders
+ WE HAVE MORE THAN YEARS EXPERIENCE IDENTIFYING OPPORTUNITIES, BUILDING TECHNOLOGY LEADERS, AND EXITING HOLDINGS + WE INVEST PRIMARILY IN EARLY STAGE COMPANIES + WE RELY ON A PROVEN STRATEGY OF HANDS-ON INVOLVEMENT IN THE DAY-TO-DAY OPERATIONS OF OUR GROUP COMPANIES THE IDEA: to bridge the gap betw
Slide 5: 2018 investments, exit proceeds and liquid resources
Exit proceeds in the last 5 years * Investments in the last 5 years * Dividends distributed in the last 5 years 2018: $12.9m invested in 8 group companies*; exit proceeds of $21m*; liquid resources balance of $74.4m *; loss of $5.3m in Q1/18 * Including RDC 5
Slide 6: Medical portfolio companies and milestones
recruited last Electrical stimulation-based treatment Rapid and automated microbiology patient for FDA trial in for ischemic stroke laboratory system March 2018 30% 69% by Elron & RDC Top-line results expected in Q3/18 Our investment: $29m Our investment: $73.2m expects to Implant for cartilage and
Slide 7: Revealing our cyber investment activities
7 REVEALING OUR CYBER INVESTMENT ACTIVITIES = ¥ 9 @M@ & A
Slide 8: Global cybersecurity spending projections
ACCORDING TO PROJECTIONS WILL BE SPENT GLOBALLY ON CYBERSECURITY FROM 2017 TO 2021 AND CRIME DAMAGE COSTS WILL HIT ANNUALLY BY 2021 The cybersecurity market grew by roughly U.S. gov’t spending on cybersecurity has over 13 years, and is the fastest increased at an average annual rate of growing tech
Slide 9: Rising cost of cyber crime
The global average cost of cyber crime per In a sample of 254 organizations, company reached $11.7M in 2017, an successful breaches per company each increase of 62% from 2013 and 27.4% from year rose more than 27%, from an average 2016 of 102 to 130 Sources: Cybersecurity Ventures: Cybersecurity Mar
Slide 10: Cybersecurity M&A and financing volume
M&A volume M&A transactions financing volume financing transactions $2B deals topped M&A activity in the cybersecurity sector in Q4 of 2017 Sources: Momentum Cyber: Cybersecurity Almanac | 2018; Cybersecurity Ventures: Cybersecurity Mergers & Acquisitions, https://cybersecurityventures.com/mergers-a
Slide 11: Cyber investment approach through RDC and Rafael
+ Through RDC (Elron & Rafael JV) we leverage Rafael’s vast cyber knowhow & organizational footprint to evaluate technologies and support their development + Leadership- Zohar Rozenberg, VP Cyber Investments: Over 20 years of experience; previously Head of the IDF's Cyber Department; joined Elron in
Slide 12: Cyber portfolio companies
Automatic detection, investigation API integration platform that speeds and remediation of security alerts digital transformation 22% by RDC 39% by RDC Our investment: $5m Our investment: $6.2m Cyber intelligence platform that Behavioral biometrics-based user Protecting enterprises from cyber analyz
Slide 13: Discover. Secdo
DISCOVER. SECDO
Slide 14: Secdo growth and funding
3.5x $5M $14M $18M 2015 2016 2017 2016 2016 2017 2018 14
Slide 15: Discover. Sixgill
DISCOVER. SIXGILL
Slide 16: Sixgill: cyber intelligence platform
2014 OUR INVESTMENT: 2016 $3.5M $4.5M Terra Venture Partners To expose cybercrime on the Dark Web at the design & planning stages, and to provide enterprises with early threat signals & actionable intelligence OUR A cyber intelligence platform that detects & defuses threats before HOLDING: 22% they
Slide 17: Dark Web can't be crawled and indexed
that requires very little technical expertise that makes it difficult for an enterprise’s threat intelligence program to determine which threat poses a realistic risk to the organization where criminals are “armed” with powerful automated tools The Dark Web can’t be crawled & Sites are rarely
Slide 18: Dark web intelligence automation is key for efficient security
DARK WEB INTELLIGENCE AUTOMATION IS KEY FOR EFFICIENT SECURITY + PREVENT attacks before they occur + DETECT and CONTROL organizational data leaks + OBSERVE the attacker and planning process Sixgill is invisible to cyber SixGill traces malicious activity criminals back to their original sources + GEN
Slide 19: Discover. SecuredTouch
DISCOVER. SECUREDTOUCH
Slide 20: SecuredTouch: behavioral biometrics authentication
2015 OUR INVESTMENT: 2016 $4.5M $11.3M Global Village Advisory, Upwest Labs To say goodbye to passwords & security questions, by providing real time identity verification for digital and mobile transactions OUR Solution that profiles users based on their physical behavior with HOLDING: 29% devices,
Slide 21: Behavioral biometrics and fraud drivers
[Behavioral biometrics = the uniquely identifying and measurable patterns in human interaction with a device] 1 3 Speed and ease of use rank among REDUCE FRICTION Online shopping presents the CONTINUOUSLY the top 3 criteria to make a WITH SEAMLESS greatest fraud opportunity DETECT STOLEN payment sol
Slide 22: SecuredTouch: strengthen security and reduce fraud
SECUREDTOUCH: STRENGTHEN SECURITY AND REDUCE FRAUD WHILE IMPROVING CUSTOMERS’ DIGITAL EXPERIENCE SecuredTouch creates a dynamic digital profile to confirm the user's identity and develop ongoing authentication g Machine-leaming Model —\ me Baseline profiles 000 inger size Authenticate Block MORE THA
Slide 23: Discover. IronScales
DISCOVER. |RONSCALES
Slide 24: IronScales: anti-phishing platform
2014 OUR INVESTMENT: 2015 $2.5M $7.5M K1 Investment Management To protect enterprises from cyber phishing attacks Automatic anti-phishing prevention, detection and response OUR HOLDING: platform Sales; Raised $6M in a round led by K1 Investment Management in Oct. 24% ’17 The global spear phishing ma
Slide 25: Phishing attack statistics
Attempt to obtain sensitive information such as usernames, passwords, and credit card details (and indirectly, money), often for malicious reasons, by disguising as a trustworthy entity in an electronic communication About 600,000 unique 90%-95% of all phishing attacks took cyberattacks begin with p
Slide 26: Combating modern email phishing attacks
COMBATING MODERN EMAIL PHISHING ATTACKS IRONSCALES combines human intelligence with machine learning to prevent, detect and respond automatically to email phishing attacks before and after they land in the inbox i ) IRONSCHOOL Benchmark users’ phishing recognition & classification habits y 4 (9) IRO
Slide 27: Discover. Alcide
DISCOVER. ALCIDE
Slide 28: Alcide: universal data center security
2016 OUR INVESTMENT: 2016 $3.9M $11.4M Intel Capital, Israel Innovation Fund To provide universal security for hybrid, multi-cloud and multi- compute data centers OUR HOLDING: Network security platform for any combination of container, VM and bare metal data centers across private and public cloud e
Slide 29: Fragmented computing architectures create security challenges
Nowadays, organizations’ computing processes have fragmentary architectures, are scattered across locations, and use diverse technologies – CREATING NEW SECURITY CHALLENGES + 1 APP > CONSISTED OF 1 + 1 APP > PROGRAM FILE + CONSISTS OF TENS TO + 1 NETWORK > RAN ALL APPS HUNDREDS OF MICROSERVICES > +
Slide 30: A firewall per microservice
- A firewall per microservice - > Real-time visibility of the whole data center – infrastructure and applications > Works with any combination of platforms (container, serverless, VM, bare metal) and IT environment (hybrid, multi-compute, multi-cloud ) > Secures the data center against cyber attacks
Slide 31: Discover. OpenLegacy
DISCOVER. OPENLEGACY
Slide 32: OpenLegacy: legacy systems as digital services
2013 OUR INVESTMENT: 2014 $6.2M $12.7M Entrepreneurs To simplify the delivery of any core application as a digital service OUR Automatic API generation for rapidly extracting the services and HOLDING: information from legacy systems, and transforming them into mobile, web, & cloud applications 39% R
Slide 33: Legacy systems cost and risk
Legacy systems preserve In both the public and private sectors Replacing/upgrading IT systems involves significant in the U.S. (e.g. federal agencies & banks), maintaining legacy systems and (security, compatibility, data loss) consumes three-quarters of IT budgets While replacing/upgrading le
Slide 34: OpenLegacy revolutionizes legacy modernization
Magic Quadrant for Full Life Cycle API Management OPENLEGACY REVOLUTIONIZES LEGACY MODERNIZATION, OFFERING INDEPENDENCE FROM EXPENSIVE VENDORS, AND ELIMINATING HIGH COSTS AND HIGH RISK 34
Slide 35: API management acquisitions
IBM and ANZ Bank SALESFORCE GOOGLE complete integration acquires acquires APIGEE of 20 new APIs after 1 MULESOFT for year, as part of $315m $6.5b (after going public for $625m partnership at $2b valuation in Mar 2017) Sep 2016 Oct 2016 Mar 2018 Source: publicly available information 35
Slide 36: Cyber for healthcare and cloud encryption holdings
2017 2017 OUR OUR INVESTMENT: 2017 INVESTMENT: 2017 $1.5M $3M $2.5M $2.5M Accelmed To protect connected healthcare from Open up the cloud for enterprises and cyber attacks OUR regulated organizations, overcoming risks of OUR HOLDING: privacy, compliance and control HOLDING: Security platform that co
Slide 37: Elron. Opportunity. Thank you.
ELRON. OPPORTUNITY Thank you.
Slide 38: Holdings in companies and book value
Holdings in companies 1 Book value at Amount invested Mar. 31, 2018 ($m) ($m) Associates and consolidated companies: Pocared (60%) 11.3 65.3 BrainsGate (30%) 0.7 29.1 CartiHeal (31%) 5.2 16.9 Others 12.6 28.5 Companies presented at fair value: Notal Vision (17%) 11.0 13.5 Others 5.3 19.3 Total Holdi