OIF, Macquarie win big from $US700m XM Cyber acquisition

OIF Ventures
NOVEMBER 23 2021
Published in the Australian Financial Review

Our Innovation Fund has got itself a dragon.

The local VC firm was an early backer of Israeli cyber security company XM Cyber, which overnight on Monday was acquired by the world’s fourth-largest retailer and a growing force in cloud computing, Schwarz Group.

The owner of Lidl and Kaufland spent $US700 million on the acquisition, on the belief that expanding into cyber security will also help its retail businesses by improving the company’s security posture.

OIF’s return on its investment was sufficient to return its entire first $50 million fund.

“It’s a great milestone for our fund, and it is always good to provide strong cash returns to our investors. It is also a very positive milestone for the broader Australia tech ecosystem,” OIF general partner Laurence Schwartz said.

“The XM Cyber team are world-class leaders and have built world-class technology. Cyber security continues to pose a massive risk globally and XM Cyber, Kasada and others are leading the way globally in tackling this challenge.”

Local multinational investment bank Macquarie also had a position on XM Cyber’s capital table and is expected to have netted a healthy return on its investment.

Macquarie Capital invested as part of a $US17 million Series B raised by XM in 2020, in which OIF also participated, and so did Swarth Group and NASDAQ Ventures.

XM plays in the attack path management space, helping companies simulate how a breach could occur, exposing vulnerabilities in their systems that can then be fixed before a real attack occurs.

Led by co-founder and CEO Noam Erez, the business will continue to operate independently under its own brand and its current structure.

“With the backing and international footprint of the largest European retailer, we can accelerate innovation and growth and further strengthen our position in the global cybersecurity market. I would like to take this opportunity to thank our investors who have supported us along the journey in building this unique company,” he said.