"Israeli tech is proving to the world—and to itself—that it cannot be stopped"
Israeli tech’s rapid recovery in 2024 has surprised many, but not Sarit Firon. The veteran investor behind Team8 Capital’s biggest exits explains why founders, employees, and global investors continue to bet on Israel—even in the toughest times.
The name Team8 is primarily associated with is Nadav Zafrir, who founded the investment group, before recently being appointed as the CEO of Check Point. But behind most of its major exits stands someone else: Sarit Firon (58), a managing partner at Team8 Capital and one of the most experienced and record-breaking investors in the local industry. She is responsible for the group's two largest and most successful exits to date—the sale of cybersecurity companies Dig and Talon to Palo Alto Networks for a combined $1 billion.
These are not the only two exits Team8 Capital has achieved amid the war. Last July, Firon also oversaw the sale of the insurtech startup Planck for $300 million to the insurance software company Applied Systems, which subsequently established a development center in Israel based on the acquisition.
Zafrir founded Team8 in 2014 as a kind of accelerator for building cybersecurity companies—an incubator program for startups in their early stages—and brought in Firon just before the outbreak of the coronavirus to establish a more traditional venture capital operation. Since then, Team8 Capital, where Firon is joined by partners Liran Grinberg and Hadar Siterman Norris, has completed investments from its first fund, raised a second fund in the midst of the war (from which it is currently investing), and is preparing to raise its next fund.
"I knew the fund was performing well, but I didn't realize just how well until investors showed me we were outperforming everyone on the standard return metrics," says Firon, one of the leading women in the industry. "In fact, so far, we’ve only had one company in our portfolio exit without generating a significant return," she notes with pride.
However, Firon begins the conversation, almost predictably, with an event that is both personal and professional: the sale of the startup Alterya, founded by Elad Fouks, who is married to her eldest daughter, for $150 million to Chainalysis. While she was not an investor in the company, she advised on the sale process, particularly given that Fouks spent most of the lead-up to the deal on extended combat reserve duty in Sayeret Matkal, the General Staff's Special Reconnaissance unit.
All of these deals make Firon more optimistic in a year that has been one of the most challenging for Israel. She is even more optimistic now than she was in the months before the war, during the judicial overhaul.
Were you surprised by the fundraising and exits over the past year?
"Investors from abroad still see Israel as a technology hub second only to the United States, and they continued to demonstrate their confidence by coming here. In the past, this might have surprised me, but today, it doesn’t. Sometimes you need to hear how people from the outside talk about Israel to feel encouraged—and even inspired. The fact is, huge international funds like Sequoia and Greylock opened offices in Israel this year.
"What did surprise me was the speed of recovery and the resilience of entrepreneurs. Activity has picked up since January 2024—much faster than expected, following the initial shock of the fourth quarter of 2023. At first, no one understood how the recovery was happening in the middle of a war, but my explanation is the sheer determination of both founders and employees. The phrase that has become almost a motto—'Israeli tech delivers, no matter what'—couldn’t be more accurate. And I don’t mind that a competing fund coined it," Firon laughs, referring to the campaign launched by VC firm Viola to reassure customers and investors in Israeli high-tech in the first months of the war.
As the war nears its end, is high-tech preparing for a strong 2025?
"There is definitely a recovery. If the war ends this year, it will bring even more investors back. We haven’t yet returned to the high levels of the past, so there’s room for growth. We’re going to see a surge in new startups—many reservists were occupied and unavailable, both physically and emotionally, to launch companies, but they have ideas. We’ll also see rapid fundraising rounds—good companies, but at lower valuations."
Firon references reports about a capital raise by fintech company Rapyd at a valuation of $3.5 billion—65% lower than the $10 billion valuation from its last round in 2021. "We will see IPOs and companies like HiBob, which, even after the bubble burst, managed to raise at a higher valuation. That’s why I predict that what we saw in 2024 will be amplified in 2025. On the other hand, if the war doesn’t end, all of this will be postponed to 2026.
“But in any case, it reminds me of when my daughters were little—after every illness, there was always a growth spurt. I believe the same will happen with Israel."
"Reality strengthened the entrepreneurs"
Firon is used to being the only woman in the room throughout her career. She didn’t enter venture capital from the worlds of entrepreneurship or a joint military transition, as is the case with most partners. Instead, she built her career steadily over 30 years. A trained accountant, she worked at the Kesselman firm before moving to the Zisapell brothers' RAD Group. There, she got her big break and became a rising star when she was appointed CFO at just 30. Later, she led the IPO of Radcom on Wall Street and served as CFO of P-Cube, a company that planned to go public but was ultimately sold to Cisco for $200 million. Remarkably, the deal was signed while Firon was in labor, delivering her third daughter.
She briefly considered taking a break—which didn’t happen—and instead became an angel investor, once again entering a field where few women were active, especially more than a decade ago. In 2012, she made the most successful investment of her career, one that few investors can boast of. She invested about $140,000 in a young company called Datorama, where she was more than just an investor; she was a true mentor. Firon closely guided the founders all the way to the company’s sale to Salesforce for $800 million, just six years after its founding. This exit turned her $140,000 into around $14 million, placing her in the exclusive club of senior investors with a golden touch in Israel.
"To prove to the world that we can't be defeated"
Before joining Team8, Firon was a partner at the Cerca venture capital fund, a fund founded by local CFOs that typically participates in fundraising rounds without leading them. When she moved to Team8, she wanted to have more direct involvement with the companies she invests in. But nothing could have prepared her for the intense level of involvement required when the war broke out, forcing some entrepreneurs into long-term reserve service and preventing them from managing their startups.
Did you find yourself managing startups?
"Yes, we have several companies in the fund where both founders were in the reserves. Hadar and I stepped in as much as we could to minimize the damage to the businesses. We have one startup where the founder is an officer in the Shaldag unit and was in reserves for many months. Another company had a founder who was in reserves for five months in a classified unit, while his partner served in the military police, guarding prisoners. So, I became both the acting CEO for these companies and, at the same time, the military commentator for the fund’s investors, who constantly wanted updates on what was happening. After the beeper operation, there was real admiration, but, of course, not everything was rosy. At first, there was genuine concern. The fund’s investors asked me if, in future rounds, there would be other investors willing to put money into these startups."
And what is the situation of these companies today? Can gaps caused by the long absence of the founders, who are also the senior managers of the startups, be filled?
"There’s something very powerful happening here, and it’s about proving to both the world and ourselves that no one can defeat us—that we have strength. As soon as the founders returned from reserve service, we saw, to our surprise, that their companies achieved the best results in 2024. They attacked the situation as if it were the project of their lives, even though it took them a month or two to recover from their military service. Instead of weakening, the reality actually strengthened them. I’m confident we will see high-tech prosperity in the coming years. I also see this shift among investors, who are beginning to look at entrepreneurs differently."
So, are there any positive outcomes from the difficult war?
"Certainly. The CEO who was in reserves for five months and received the Israel Defense Award for his actions during this period will bring further development to the ecosystem through innovation. Artificial intelligence also received a boost during the war, accelerating many developments. So even though we were late to the train in some areas, I’m confident that in others, we’ll take the lead. The whole story of DeepSeek, a Chinese AI model, shows that it’s not too late to compete with large language models (LLMs), and I’m sure there are people currently developing something innovative in this space. But where we truly excel is in the startups that leverage AI to enhance their development. We’re just scratching the surface in this field."
Again, we’re talking about a wave of startups that will be founded by those returning from the battlefield, and most of these are men. When will we see more women entrepreneurs?
"We currently have two portfolio companies with female CEOs and founders. While these are just two out of 25, it’s a significant improvement from what it used to be. I see more women in development today. When I was starting out, there were no women developers; the only women I encountered in the companies I worked for were in HR departments. Having been in the industry for so many years, I’ve seen a big change. For someone entering now, it may seem like a small thing."
