The fall of Skybox Security: A cautionary tale of stagnation and lost vision
Once a leader in cybersecurity, the company shut down after failing to adapt to an evolving market.
For more than two decades, Skybox Security was a name synonymous with cybersecurity innovation. Founded in 2002, the Israeli firm was among the pioneers of attack simulation technologies and network modeling, providing solutions to some of the world’s largest corporations. But despite raising more than $330 million and generating over half a billion dollars in revenue, the company abruptly shut down, laying off all its employees and selling its assets to Israeli competitor Tufin.
Its demise raises troubling questions—not just about Skybox itself but about the fragility of well-funded cybersecurity firms that fail to evolve with the market.
A pioneer that lost its edge
Skybox co-founder Gidi Cohen, who led the company for 21 years before stepping down in 2023, described the closure as “a very sad ending” and admitted that even he was taken by surprise. “While I left the company about two years ago, being completely disconnected from the business since I moved on, I kept in touch with many of the company’s employees around the world who were super professional, passionate, and committed to its success,” Cohen wrote on LinkedIn.
His words capture the shock felt across the cybersecurity industry. Skybox had served “hundreds of Global 2000 companies in more than 50 countries,” and Cohen noted that the company had experienced “a couple of large liquidity events a few years back.” Despite these milestones, Skybox ultimately failed to sustain long-term growth.
Too little reinvention
Skybox’s troubles began long before its closure. After securing a massive $150 million funding round in 2017—$100 million from CVC Capital Partners and $50 million from Pantheon Ventures—the company struggled to turn investment into innovation. While it continued to sell network security solutions, insiders say its transition to SaaS failed to gain traction.
Over time, Skybox relied heavily on its existing customer base, but that base was shrinking. Some of its earliest products were still in use until the company's final days, a sign that its attempts at reinvention never fully materialized.
For years, it avoided the brutal reckoning faced by many cybersecurity firms thanks to its deep funding reserves. But eventually, even that wasn’t enough.
Tufin steps in—but not to save Skybox
Unlike traditional acquisitions, Tufin’s purchase of Skybox’s assets was highly selective. CEO Raymond Brancato made it clear that his company did not assume Skybox’s customer contracts or ongoing support responsibilities. Instead, Tufin is positioning itself as an alternative for Skybox’s stranded clients.
“We just purchased limited assets as well as some limited business information from Skybox,” Brancato told Information Security Media Group. “We did not purchase the company, and we did not purchase the contracts.”
For Skybox’s former customers, this means that they must actively choose to migrate to Tufin rather than being automatically transferred. Tufin is offering flexible pricing, expedited onboarding, and a “transition package specifically designed for Skybox customers,” Brancato said, adding that the company will provide “unlimited access to the Online Learning Center and training packages.”
Brancato added that while the acquisition didn't include Skybox's employees, Tufin is considering hiring ex-Skybox staff.
"We definitely are working with experienced resources from Skybox," Brancato added. "We're working through that now to see if we can hire as many people as possible to support a smoother transition to Tufin's Orchestration Suite."
A warning for Israel’s cybersecurity sector
The closure of Skybox Security serves as a harsh reminder that no amount of funding can guarantee success. The cybersecurity landscape is evolving rapidly, and companies that fail to adapt risk obsolescence.
While Israel remains a global cybersecurity powerhouse, Skybox’s downfall highlights an uncomfortable reality: some of the industry’s most well-established players may not be as resilient as they appear. The lessons from Skybox’s failure are clear—stagnation is fatal, and even cybersecurity giants can disappear overnight.
