Cybersecurity startup NanoLock collapses, seeks court-appointed trustee
The Israeli firm, once backed by $27 million in funding, cites war-related financial strain and cash flow crisis as it halts operations.
The Israeli cybersecurity company NanoLock Security filed a request on Wednesday with the Central District Court for the appointment of a temporary trustee due to its insolvency. The request aims to preserve the company’s assets and retain some of its employees while urgently seeking to maximize the realization of its assets through a sale of its operations. According to the filing, the company has debts of approximately 7 million shekels ($1.97 million) and an additional $2.5 million in debt to shareholders.
NanoLock is a startup specializing in the protection and management of industrial controllers used across various industries, including food, energy, ports, hospitals, and manufacturing. The company employs 26 people, but in recent days, it has notified employees of the cessation of operations and the termination of their employment. NanoLock was founded in 2017 by CEO Eran Fine.
The filing states that many controllers produced by various suppliers lack basic cybersecurity protections. NanoLock’s technology is designed not only to protect these controllers from unauthorized changes but also to provide management, monitoring, and enforcement capabilities for operational and policy changes. The company is owned by a parent company registered in Delaware, USA.
According to the request, NanoLock’s customers in Israel include Israel Chemicals and Tosaf. The company was also in advanced discussions, though without finalized installations, with Sheba Tel Hashomer Hospital and Ashdod Port. Additionally, NanoLock had ongoing engagements at various stages with other companies in Israel.
Since its founding, the American parent company has raised approximately $27 million in multiple investment rounds and received $2.5 million in shareholder loans. Of these funds, approximately $28 million was invested in NanoLock. The company also secured a $2 million loan from Discount Bank, of which about $1 million has been repaid. Additionally, it received grants totaling approximately $3 million from the Israel Innovation Authority.
The filing claims that despite investors pouring tens of millions of shekels into the company, changing market conditions—including the war and its impact on customers—along with difficulties in developing specific product features and the long sales cycles required to engage customers, have led to severe cash flow problems. As a result, the company now faces financial distress.
The request further asserts that, given the company’s lack of funds to continue operations and product development, along with its outstanding debts, it has no choice but to cease operations. The company argues that appointing a trustee is the only viable option to maximize its remaining value, potentially through the sale of its operations, intellectual property, or technology, which requires significant effort and investment to develop.
Attorneys Yonat Meir and Shai Piade, representing the company, stated: "Over the past year, and in the shadow of the war, NanoLock Security has faced significant financial and operational challenges that have affected its business. Given these circumstances and the difficulties involved, the company has turned to the court to initiate appropriate proceedings. NanoLock thanks all its employees, customers, and partners for their support and trust over the years."
