Cybereason CEO Resigns Amid Funding Dispute with Investors
Eric Gan, the CEO of Cybereason who has accused two of the cybersecurity company’s largest financial backers of hobbling its ability to raise more money, reportedly is resigning in the midst of an ongoing boardroom controversy.
The resignation, reported by Bloomberg, is the latest upheaval in a months-long struggle that has put the La Jolla, California-based security vendor in a financial squeeze that Gan said in a lawsuit against SoftBank Vision Fund (SVF) and former U.S. Treasury secretary Steven Mnuchin is driving Cybereason to Chapter 11 bankruptcy.
Further complicating the financial picture, a planned merger with competitor Trustwave, announced in November 2024, also was terminated, Bloomberg reported, citing an unnamed person familiar with the situation.
Blocking Funding Plans
In the lawsuit filed last month in Delaware Chancery Court, Gan – a longtime SoftBank executive who took over the Cybereason CEO post in 2023 – said SVF and Mnuchin had blocked more than a dozen financing plans put forth by Gan and Cybereason’s executive team and board members. The investor spiked the plans to preserve their own financial stakes in the company, he alleged.
In addition, Gan said that SVF and Liberty Capital – the investment company run by Mnuchin – proposed their own financing strategy that wouldn’t include participation by Cybereason management, a move that would have put more power over the vendor’s future with the two investors. The plan also said that Cybereason couldn’t raise capital from anyone but SVF and Liberty, according to the lawsuit.
“This is not just a dispute over financing – it’s a deliberate strategy to preserve financial advantages at the expense of the company’s survival,” Gan said in the lawsuit.
Both SVF and Mnuchin denied the allegations. Mnuchin and Daniela Llobet, a director with SVF, sit on the Cybereason board.
Decision to Leave
Bloomberg report that in an internal email to Cybereason employees, Gan wrote that he “cannot continue to lead a company where critical decisions are made based on personal interests rather than what is best for the organization. I cannot stand by while minority shareholders, employees and customers suffer the consequences.”
The company’s CFO, Manish Narula, reportedly was named to replace Gan as CEO, and an announcement will be made this week, another unnamed source said. As of March 5, Gan was still listed by the company as its CEO.
Cybereason’s history includes a steady rise to its heights in 2021, followed by a decline that saw its valuation drop from about $1 billion to more than $300 million. The company also has had at least three rounds of layoffs in an attempt to save money, shedding about 300 jobs. Gan was tapped in the midst of all this to replace one of the founders, Lior Div, as CEO.
Div is now co-founder and CEO of agentic AI-powered security firm 7AI.
Looking for Money
Bloomberg reported that SVF and Liberty have been working over the past month to secure at least $100 million in investments into Cybereason.
The planned merger with Trustwave was expected to create a more powerful player in a global managed detection and response (MDR) space that is expected to expand from $1.89 billion this year to $8.59 billion by 2032.
The company’s AI-based Cybereason Defense Platform includes a range of capabilities, from cloud, network, and identity security to endpoint detection and response (EDR), MDR, threat hunting, digital forensics, and incident response.
It can be deployed on premises, in the cloud, or in a hybrid environment, and supports systems running Windows, Linux, Android, and Apple’s Mac and iOS.
Despite resigning, Gan doesn’t appear to be giving up on the lawsuit, telling Bloomberg, “I’m still fighting for justice.”
