Security systems developer Cyota raises $11m, backers can invest $5m more - TheStreet

Israeli startup

Cyota

, which develops technology facilitating secure credit cards payments online, announced it has secured $11 million in financing.

Cyota also reported that investors received an option to invest another $5 million. The investment and option value the company at a pre-money company value of $18 million.

Yesterday Dolev and Abramovitch Hi-Tech Consulting reported that Cyota was going to settle for $8 million.

The round was led by

Giza GE Venture Fund

. Other investors include Toshiba, via Triangle Technologies, which links between Israeli companies and Japanese investors and conglomerates;

Poalim Capital Markets

;

Israel Seed Partners

; an unnamed Asian investor; and an unspecified European bank.

Although the amount raised significantly increases the company's values, Cyota had originally hoped to raise $16 million to $19 million.

Cyota began its financing moves during the summer, starting with a target sum of $10 million. But as the process went on, the circle of potential investors grew. By October the planned round had expanded to $19 million.

At which point Nasdaq plunged, relations between Israelis and Palestinians spiraled into bloodshed the Israeli government headed by Prime Minister Ehud Barak collapsed. Investor enthusiasm noticeably chilled, and Cyota was forced to settle for only $8 million.

Cyota's technology addresses the paramount problem of online payments using credit cards: theft. Cyota's software attributes a special number with a short shelf-life to credit card transactions. Unlike the numbers of regular credit cards, the Cyota-generated number is limited in sum, and expires soon, thus minimizing the damage from possible theft.