Israeli cyber exits hit all-time high of over $7 billion in 2023
Israeli cyber exits hit all-time high of over $7 billion in 2023
The total sum of exits in the Israeli cyber sector in 2023 was the highest ever, but the number of exits decreased by 35% compared to its peak in 2021. The volume of funding rounds was the lowest in the past five years
Despite the ongoing war and civil unrest against the backdrop of changes in the legal system, the exit amounts of Israeli cyber companies in 2023 reached record highs, totaling $7.1 billion, according to data in the Cybertech Global and IVC report. This marks a 65% increase compared to $2.45 billion in 2022, and a 22.5% increase compared to $5.5 billion in 2021.
This figure is even more significant given the fact that in 2023, no Israeli cyber companies went public, and only acquisitions were made. The first quarter of 2024 also opened on a positive note. Despite the ongoing war, the Israeli cyber sector recorded exits totaling $985 million. However, the number of exits for Israeli cyber companies dropped by 35%, from 37 exits in 2021 to 24 exits in 2023. In the first quarter of 2024, 8 exits were recorded.
The report, released ahead of Cybertech Global Tel Aviv 2024, the decade anniversary of the event that starts on Monday, said that the total funding raised by Israeli cyber companies in 2023 amounted to $2.38 billion – the lowest figure in the past five years. This marks a decrease of 43% compared to 2022, which saw $4.17 billion raised. In the first quarter of 2024, the cybersecurity sector stood out significantly with funding rounds totaling approximately $620 million, constituting 38% of the total funding raised in the first quarter of the year.
In the first quarter of 2024, investment in Israeli cyber companies was distributed as follows: $51.77 million in Seed-stage companies, $48 million in Series A companies, $30.25 million in Series B companies, $15 million in Series C companies, and $476 million in later-stage companies (Series D and beyond). Over the past six years, late-stage rounds (Series D and beyond) have been leading in fundraising. In contrast, Seed-stage rounds attracted the least amount of funding, although they recorded the highest number of investments.
According to the report, there are 522 active cyber companies in Israel. The majority are in the early revenue stages (276 companies), with the rest in the research and development stages (125 companies), growth stage (generating revenues of $10 million or more per year – 96 companies), and Seed stage (25 companies).
