The five biggest megarounds of 2023 in Israeli tech
The five biggest megarounds of 2023 in Israeli tech
Cloud security startup Wiz’s $300 million Series D was the largest funding round by an Israeli startup in the past year, followed by Next Insurance ($265 million), eToro ($250 million), Cato Networks ($238 million), and AI21 ($208 million)
Raising funding was far from straightforward over the past year. This was true for small and large startups alike. However, there were exceptions to the rule, with some of Israel’s most promising unicorns raising massive funding rounds in 2023.
In total, 13 Israeli companies raised ‘megarounds’ (over $100 million) this year, with honorable mentions going out to HiBob ($150 million), Tipalti ($150 million), VAST Data ($118 million), Island ($100 million), Cyera ($100 million), Cybereason ($100 million), UVeye ($100 million), and Pinecone ($100 million).
Below are listed the five largest funding rounds completed by Israeli startups during 2023.
Cloud security startup Wiz continued its incredible ascent when it raised $300 million in a Series D funding round at a $10 billion valuation back in February. Despite the economic downturn, Wiz’s valuation has surged since it raised $250 million at a $6 billion valuation in October 2021. The Series D was led by new investor Lightspeed Venture Partners and existing investors Greenoaks Capital Partners and Index Ventures. According to the company, Wiz is the world's largest cybersecurity unicorn and the fastest SaaS company to achieve a $10 billion valuation.
Since its inception almost three years ago, Wiz has raised $900 million from investors, including Sequoia Capital, Insight Partners, Blackstone, and G Squared. The company is also backed by prominent private investors and leading entrepreneurs such as the world's wealthiest individual, Bernard Arnault, and Starbucks founder Howard Schultz.
Wiz was founded in March 2020 by CEO Assaf Rappaport, CTO Ami Luttwak, VP Product Yinon Costica, and VP R&D Roy Reznik. Rappaport was previously General Manager of R&D at Microsoft Israel after having sold his previous company Adallom to the tech giant for $320 million in 2015. Wiz’s other co-founders have been with Rappaport since his days in the military and filled various roles at Adallom, too.
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Alon Huri, Guy Goldstein and Nissim Tapiro of Next Insurance.
(Credit: Next Insurance)
Israeli insurtech unicorn Next Insurance raised $265 million in November, with investments from insurance giants Allstate and Allianz X, who both entered into a partnership with the company. This funding round - the largest in the company's history - brought the total amount raised by Next to approximately $1.1 billion since its founding. Previous funding rounds included TLV Partners, Group11, FinTLV, Battery Ventures, Capital G, Munich Re, and private investor Oren Zeev.
Next specializes in insuring small and medium-sized businesses in the U.S., a market where major insurance companies are absent. The current investment by American insurance giant Allstate is strategic, and they will begin marketing Next's insurance on their platform.
Next Insurance was founded in 2016 by CEO Guy Goldstein, Chief Growth Research Officer Alon Huri, and CTO Nisim Tapiro. According to Next, they recently crossed a significant milestone of 500,000 active customers in the U.S. across 1,300 types of businesses.
After canceling its plans to go public on Wall Street, eToro announced in March that it raised $250 million at a $3.5 billion valuation. eToro announced in July 2022 that it mutually agreed with a Betsy Cohen-backed SPAC to terminate their merger deal more than a year after it was announced. The companies announced back in March of 2021 that they had agreed to merge at a company valuation of $10.3 billion. However, the deal was bogged down by a protracted prospectus and regulatory process, and worsening market conditions.
Although the value in the funding round is far from the one at which the offering was planned, it is still an increase compared to the last known value of the company, which was $2.5 billion at the end of 2020. The latest fundraising was led by ION Group and Softbank's Vision Fund 2. Other investors included Social Leverage and Spark Capital.
Cato Networks, co-founded by Shlomo Kramer, one of the founders of Check Point, secured $238 million in funding at a valuation exceeding $3 billion in September. This funding brought the total raised by the cloud security platform provider to $773 million.
While it represented a relatively modest increase in value compared to two years ago when the company raised funds at a $2.5 billion valuation, it is considered an achievement, given the current market conditions.
The fundraising round was led by LightSpeed Venture Partners with the participation of Adams Street Partners, Softbank Vision Fund 2, Sixty Degree Capital, and Singtel Innov8. This fundraising came on the heels of Cato adding several large companies to its customer list, including Carlsberg. The company now serves 1,800 organizations. Cato is credited with pioneering the Secure Access Service Edge (SASE) category, which ensures secure connections for remote workers to organizations.
AI21, which develops AI systems for enterprises, announced in November the completion of its $208 million Series C funding at a valuation of $1.4 billion. The Israeli company develops AI and large language models (LLMs) and revealed in late August that it had already raised $155 million in its Series C.
Participation from additional new investors included Intel Capital, the venture capital arm of Intel Corporation, and Comcast Ventures, the venture capital arm of Comcast Corporation, which joined previously announced investors. This new round of funding brought the company’s total capital raised to $336 million.
Founded in 2017 by Prof. Amnon Shashua, also co-founder of Mobileye, Prof. Yoav Shoham, and Ori Goshen, AI21 Labs was one of the first to bring generative AI to the masses. The company's text-based generative AI services, with advanced LLM and natural language (NLP) technologies, serve both consumers and Fortune 100 companies.
