In a remarkable display of resilience, Israel’s cybersecurity sector witnessed an unprecedented surge in investments during 2024, reaching $4 billion despite the ongoing military conflict with Hamas in Gaza and Hezbollah forces in Lebanon.
According to a comprehensive analysis by YL Ventures, a prominent US-Israeli venture capital firm focusing on early-stage cybersecurity investments, domestic cybersecurity enterprises secured $4 billion through 89 funding rounds in 2024, marking a significant increase from the $1.89 billion raised across 71 deals in 2023. The funding primarily targeted companies developing solutions for cloud security and artificial intelligence threat mitigation.
The State of the Cyber Nation Report emphasized that this substantial increase in funding demonstrates sustained global trust in Israeli cybersecurity innovation and expertise, even as the nation grappled with wartime challenges that brought about “geopolitical, defense, economic, and internal distress, creating an unstable and unpredictable environment.”
“Israel’s high-tech sector, the nation’s economic cornerstone, maintained its delivery of innovative products, services, and customer support globally, while managing widespread military reserve duty mobilization, war-related economic disruptions, and heightened national security measures,” noted YL analysts in their report. “The Israeli cybersecurity industry, representing the country’s premier high-tech segment, also experienced significant war-related impacts.”
Israel maintains its position as a global cybersecurity leader, with its startups capturing approximately one-third of worldwide private investments in the sector.
The report revealed that growth-stage cyber companies dominated the 2024 funding landscape, securing roughly $2.9 billion across 16 Series C and later rounds. However, this figure includes a notable outlier: Israeli cybersecurity unicorn Wiz’s exceptional $1 billion fundraise. The investment in later-stage cyber companies showed substantial growth compared to the $888 million raised in the previous year.
“These investment figures reveal the remarkable resilience of Israel’s cyber ecosystem,” commented YL Ventures analyst Or Salom. “We’re witnessing more than just recovery; it’s a testament to our ecosystem’s maturation.
Israeli entrepreneurs have consistently demonstrated technical excellence, and now they’re complementing it with sophisticated business understanding,” Salom explained.
According to the report, international investors were the primary source of capital flowing into Israeli cybersecurity ventures. Leading global venture capital firms, including Sequoia, Greylock, Battery Ventures, and General Catalyst, significantly increased their investments in Israeli cyber startups. Despite the ongoing conflict, global VCs’ participation in early-stage investments saw a notable rise, with seed rounds increasing from 10 in 2023 to 22 in 2024.
“The trends emerging in 2024 — increased early-stage investments from global VCs, expanding seed and growth round markets, and rising acquisitions, particularly by Israeli firms — indicate positive momentum for 2025,” noted Andy Ellis, Partner at YL Ventures. “While we don’t anticipate a sudden surge, we expect consistent growth across all segments.”
The year 2024 witnessed an unprecedented 50 seed funding rounds, securing a record $400 million in investments for early-stage cyber startups. This marked the highest number of funding rounds in six years, showing an increase of 14 rounds compared to 2023.
