Israeli startup CyberRidge, which has developed a photonic-based encryption layer for optical fiber networks, has emerged from stealth with $26 million in funding. The round includes a $10 million seed investment led by Canadian-Israeli global investment group Awz, and a $16 million extension from Arkin Capital, Redseed VC, Elron Ventures, and the EU Horizon-EIC program. The company introduces a transformative approach to securing data in transit by making it disappear.
This is the fifth startup founded by CyberRidge CEO Prof. Dan Sadot, 62, from Ben-Gurion University of the Negev, who for nearly 30 years managed the optics communications laboratory there. But he always aspired to get out of academia and apply the solutions he developed in the real world. He has previously founded four startups, two of which closed, two of which were successfully sold, including Banias Labs, which he founded with serial entrepreneur Avigdor Willenz, and sold for $240 million two years ago.
Today Sadot has unveiled his latest company, which is already arousing interest in the defense establishment and could provide a solution to one of the most frightening threats to world peace – the use of quantum computers by terrorist organizations, hackers and states to crack the encryption that underlies the global economy, a threat known as “post-quantum.” Although quantum computers have not yet reached sufficient efficiency, they may achieve a “quantum advantage” by the end of the decade – an advantage that will make them more efficient than standard supercomputers and consequently, allow them to break the standard encryption of credit card companies, e-commerce sites and banks in minutes, which a regular computer can only break after centuries.
Sadot is targeting the fiber-optic market at sea and on land, a global network of hundreds of thousands of kilometers over which 95% of global digital communications pass. This network is used for banking and stock market transactions, government records, AI processing, medical data, and sensitive security information. The Pentagon and EU are already encouraging banks and large organizations to prepare for the doomsday when the age of quantum computers will achieve the same quantum advantage, a day that could theoretically come at any moment.
But a quantum computer, no matter how powerful, has one major drawback, claims Sadot. He says, “It must receive some kind of digital signal to decrypt the encryption.” The solution he devised at CyberRidge uses a solution from the world of optics – it masks the signals under a cloud of random noise of photons (light particles). “We ‘bury’ the light that carries the data under optical background noise, using optical amplifiers,” says Sadot. “And if there is no ‘input’ and no digital signals, there is no ability to hack and record the information.”
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The signals and masking are not produced by a regular laser, which is usually used in the optical information industry, but by lasers from the world of satellite synchronization that produce short pulses in a very broad light spectrum, making it possible to record data in a wide optical spectrum, and to “spoil” it by “burying” it under real optical noise. The only way to recover the data is by using a photonic key that changes every fraction of a second and must be present at the exact moment the optical signal arrives. “In its absence, the data is lost forever. And when there is nothing to store and hack later, there is no exposure (to hacking).”
In the past six months, the product has been successfully tested in Telecom Italia’s advanced optical laboratories in Turin, where it was deployed over a network of 200 kilometers of optical fiber, on a 150-kilometer fiber in Singapore, and at one of the world’s largest cloud providers, the name of which the company is not disclosing. An Israeli security agency has deployed the technology in one of its operational systems and is considered the first major paying customer.
“You feel a slowdown and a reluctance because of the war”
CyberRidge isn’t waiting for the first efficient photonic computer to sell its products. The company can already protect against standard fiber-optic intrusions to steal data, a relatively simple activity..
The company has 20 employees in the Azrieli Sarona Tower in Tel Aviv, which also houses Awz’s offices, and another 15 freelance employees working in laser development in Switzerland. They did all these demonstrations and grants during wartime. “You feel a slowdown and reluctance,” Sadot tells “Globes.” “We didn’t have a slowdown in Italy and the EU, but there were some that challenged us in Spain There was activity that was halted and NATO hinted to us that working with them would have to be through a European company. It’s not a walk in the park, but business continues.”
How real do you think the “post-quantum” threat really is?
“No one has any idea what it will look like, there are already instructions from the Pentagon and the EU for large commercial entities to prepare for it. But we don’t have to wait for a quantum computer – we can already see how new encryptions are being broken every day by Russian submarines hacking into underwater fiber optics or hostile teams that disguise themselves as “CIA”-style maintenance personnel, wear fake vests and physically hack into the fiber optics.
“They usually obtain the encryption key by bribing the key owner or by quoting the key, and these are currently the majority of documented cases of communications encryption breaches. We also prevent this phenomenon, because when the key is stolen – at that moment the data will be lost forever, so the only way to steal the data is directly from the server and not from the optical fiber but it is much more difficult to get there.”
The optical solution offered by Sadot is not the only one, of course, for the post-quantum threat. Governments, militaries, and critical infrastructure organizations are already preparing for this era using post-quantum encryption (PQC) software. These are more sophisticated encryption methods that include a transition from currently common encryption systems, such as RSA or ECC, to new algorithms that are more resistant to quantum computing power, or using physical approaches such as quantum key distribution (QKD), a quantum method that requires two parties to share an encryption key, but when a third party connects to it and listens to it – the very act of listening changes the pattern of photon activity and the parties immediately notice this.
Published by Globes, Israel business news – en.globes.co.il – on October 28, 2025.
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