A true story from the German Mittelstand
The IT security in German Mittelstand is insufficient. The danger is often underestimated. Hence the protection of IT systems must not be neglected. Attackers are aware of this and that is why SMEs are increasingly targeted by cybercriminals. Even with small budgets, many of such common vulnerabilities can be eliminated, for example when dealing with passwords and authorizations.
According to the industry association Bitkom, three out of four companies with 100 to 500 employees have been affected by IT security incidents in recent years.
We have learned from a “Mittelstand” company that it became the victim of a cyber attack lately. The origin of the ransomware (malware, phishing, botnet) is not yet known, but the effects were devastating, as production was down for several days and employees had to be sent home. Production-relevant files were encrypted after the attack, files were renamed and moved to other folders or were invisible. The drama is hard to beat because this manufacturing company is subject to strict regulation and official supervision and therefore the entire production had to be stopped.
Certified business divisions are particularly sensitive
Quality controls for raw materials can be a problem. Certified areas cannot record properly and continue to work with it. Because quality standards are not reliably checked as a result, this leads to interruptions in the supply chain and the product cannot be delivered. The product shortage is then felt by the end consumer.
The German Mittelstand underestimates its own risk
Of course the medium-sized company was not well prepared in terms of software technology. Different older Windows versions and Open Source applications combined with a small IT department are the daily routine, certainly not only in this particular case.
Our portfolio startups
Our startup Deepinstinct* specializes in the defense against cyber attacks on PC and mobile phones using AI. Founded in New York in 2015, Deepinstinct is a developer of AI-enabled cyber security products that provide learning-based malware prevention and detection solutions for devices. It is the first and only company in this industry sector to use end-to-end deep learning to detect and prevent threats, with a proprietary deep learning stack running on Nvidia GPUs.
The startup EnvelopRisk* develops pricing modelsfor insurance companies to assess cyber attacks. Founded in London in 2016, EnvelopRisk uses AI modelling to provide pricing of insurance products for complex reinsurance risks, particularly cyber security risks, enabling insurers to calculate tailored risks and payouts for customers.
The premium growth of these two indicates the increasing problem for industry and the manufacturing sector.
DeepInstinct on Twitter @DeepInstinctSec
Deepinstinct and EnvelopRisk are Startups from “Alpha Intelligence Capital Fund 1“ portfolio we invested 2019.
Mato Krahl | MK Venture Capital
The Luxembourg domiciled MK Venture Best Selection S.C.A., SICAV-FIS is the first german Fund of Funds (FoF), focusing on european startups. The FoF focuses on single funds, which are investing in automation (like industry4.0, robotics, IoT), leisure (like HR, eCommerce, Esports) and LifeScience/eHealth.
