Israeli cybersecurity firms secured a substantial $4 billion in funding in 2024, a notable increase from the previous year, with the sector experiencing significant growth fueled by a heightened focus on cloud security and the integration of artificial intelligence technologies. This data was shared by YL Ventures, a prominent global venture capital firm, which highlighted the pivotal role of cybersecurity in Israel’s thriving high-tech industry. Representing a significant portion of the economy, cybersecurity contributes 20% to economic activity, sustains 16% of jobs, and drives over half of the country’s exports.
In its comprehensive “State of the Cyber Nation Report,” YL Ventures projected a promising trajectory for Israel’s cybersecurity sector despite ongoing geopolitical uncertainties. The report anticipates a shift from Israel being recognized solely as a provider of cutting-edge security solutions to emerging as a dominant force in the global cybersecurity market, with its startups leading the charge.
The report detailed that a total of 89 funding rounds took place in Israel throughout 2024, with 50 of them categorized as seed or early-stage rounds, collectively raising $400 million. Notably, global venture capital investors substantially increased their support for Israeli cybersecurity ventures, underscoring the sector’s attractiveness to international backers.
In terms of growth-stage funding – encompassing Series C financing and beyond – there were 16 funding rounds that amassed a remarkable $2.9 billion in investments, marking a remarkable 300% surge from the $888 million raised in the previous year. Overall, Israeli cybersecurity companies managed to raise $1.89 billion in funding in 2023, underscoring the sector’s rapid expansion.
Andy Ellis, a partner at YL Ventures, highlighted the evolving investment landscape in 2024, noting a trend of global venture capitalists engaging with cybersecurity startups at earlier stages, an uptick in seed and growth-stage funding activities, and heightened acquisition activities involving Israeli firms. Ellis predicted a buoyant outlook for 2025, with increased accessibility to funding across various stages of growth and a surge in overall investment within the cybersecurity sector.
Ofer Schreiber, senior partner and head of YL’s Israel office, attributed Israel’s cybersecurity prowess to the profound influence of the country’s elite military intelligence units, which have cultivated a culture of entrepreneurial resilience and innovation. Schreiber emphasized the adaptability of cybersecurity founders in navigating challenges, particularly citing the impact of a conflict initiated by Hamas militants in October 2023, which necessitated tech professionals to pivot towards military obligations while ensuring business continuity amid uncertain conditions and heightened customer concerns.
The continuous evolution and resilience demonstrated by Israel’s cybersecurity ecosystem underscore its position as a global leader in the field, with a robust foundation laid by the convergence of technological expertise, entrepreneurial spirit, and a commitment to innovation in safeguarding digital assets on a global scale.
(Reporting by Steven Scheer; Editing by Sharon Singleton)
