Israeli cybersecurity companies raised a record $4 billion in 2024, more than double the amount raised in 2023, fueled by increasing demand for cloud protection and artificial intelligence (AI) security solutions. According to YL Ventures’ latest State of the Cyber Nation Report, cybersecurity has rapidly become one of Israel’s fastest-growing sectors, contributing significantly to the nation’s economy, which depends heavily on high-tech industries. The sector now represents 20% of Israel’s economic activity, 16% of jobs, and more than half of its exports.
Despite geopolitical challenges, YL Ventures projects that Israel’s cybersecurity industry will continue to expand globally, with Israeli cybersecurity startups gaining recognition as dominant players on the world stage. The report highlighted that 2024 saw 89 funding rounds in Israel’s cybersecurity sector, with 50 of those rounds in early-stage (seed) funding, totaling $400 million. Global venture capital firms more than doubled their funding rounds compared to the previous year.
In the growth stage, which includes Series C and higher rounds, 16 rounds raised $2.9 billion—an increase of 300% from the $888 million raised in 2023. Overall, Israeli cybersecurity firms raised $1.89 billion in 2023. YL Ventures’ Andy Ellis believes that 2024’s funding activity signals a positive trend for 2025, with greater access to funding in early (A and B) rounds, larger investments in later (C and beyond) rounds, and a continued increase in seed-stage funding.
Ofer Schreiber, senior partner at YL Ventures, attributes Israel’s cybersecurity success to the country’s military intelligence expertise, which fosters a practical, results-driven entrepreneurial culture. However, the outbreak of war in October 2023, following an attack by Hamas militants, forced many tech founders into military service, creating operational challenges. Schreiber noted that cybersecurity founders had to adapt quickly to ensure business continuity amid uncertain economic conditions and a concerned customer base.
