Emerging hacking threats have created a cybersecurity market that is expected to "grow exponentially" in the next seven years and could hit $759 million in revenue by 2023, according to IHS Markit.
Awareness over the danger cybersecurity threats pose to business has opened the door for new companies to enter the automotive supplier world. In 2016, the industry spent just $11 million on cybersecurity across all segments, IHS said.
Several companies, many based in Israel and launched by former military cyber defense experts, have emerged as demand for security services has risen. About 112 million vehicles on the road globally are connected, making them vulnerable to cyberattacks risking driver safety and privacy.
Cyberattacks also risk damaging manufacturers' reputations.
"Consumers will give up on a brand if their car is being attacked," said Monique Lance, director of marketing at Argus Cyber Security.
Argus, which was founded in 2013 and received $30 million in funding in two rounds last year from companies such as Magna International, provides risk assessments, embedded software protection and constant threat monitoring for vehicles. Lance said she could not disclose which automakers and suppliers Argus is working with.
Other companies, such as TowerSec Automotive Cyber Security, are developing programs that can be retrofitted to cars that are vulnerable to malicious attacks. TowerSec was acquired by Harman in March for an undisclosed amount.
The auto industry only recently became open to working on cybersecurity solutions. Two years ago, automakers and suppliers had little interest in working with firms such as TowerSec, but now cybersecurity is a top priority, said Asaf Atzmon, the company's vice president of business development.
"It's pretty hot right now," he said.
Karamba Security focuses on providing "deterministic" security, meaning that once its technology is embedded in a vehicle, no additional monitoring or updates will be needed.
Though the automotive industry typically has moved slowly on new technology, Karamba Chairman David Barzilai said cybersecurity is one area where companies will be forced to move fast or face losing customers.
"If manufacturers aren't secure, their customers won't trust them," he said.
By tapping into this need, companies such as Argus, TowerSec and Karamba may have found a secure foothold in an industry that traditionally has been hard to break into, and they don't plan on losing it anytime soon.
"Cybersecurity requires several levels of expertise [automakers and suppliers] don't have," Barzilai said. "And I don't see them actually achieving it on their own."