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(Reuters)

PayPal Sets Up Israeli Security Center, Buys CyActive

Features Reuters

Online payments company PayPal, a unit of eBay (EBAY), is establishing a cyber security center in Israel and has bought local start-up CyActive to help launch the development.

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PayPal, which is slated to split from eBay later this year, did not disclose financial details but Israeli media have said the acquisition was worth $60 million.

"Located in one of the world's top cybersecurity hubs, this new security center will allow us to tap into the country's cutting-edge technology and top cybersecurity talent," PayPal chief technology officer James Barrese wrote in a blog on the company's website.

CyActive, which can predict how malicious software will develop and offer companies detection and prevention, had received a strategic investment from the venture capital unit of

Germany company Siemens <SIEGn.DE> in September. Financial details were not disclosed.

Siemens joined Jerusalem Venture Partners (JVP), an Israeli

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venture capital firm, in investing in CyActive. JVP was the main

shareholder in another cyber security company, CyberArk Software

<CYBR.O>, which went public on Nasdaq in September.

Israel's dedication to developing its defense capabilities has been extended to cyberspace in recent years, spawning an industry which has attracted a near four-fold increase in venture capital investment since 2010.

Besides jumpstarting the security center, Barrese said the acquisition of CyActive will add "future-proof technology" to PayPal's security platform.

This is PayPal's second acquisition in Israel, after

it bought FraudSciences, which monitors financial fraud, in 2008

for $169 million. PayPal has a fraud and risk detection center in Tel Aviv.

(Reporting by Tova Cohen; Editing by Keith Weir)