Israel’s cyber sector defies turmoil, raising $3.79 billion in 2024, a 56% surge
Early-stage investments grew, with 58 Seed deals in 2024—a 9.5% rise from the previous year—signaling a wave of new startups entering the market. However, the number of Series A deals dropped by 21%, and Series B deals plummeted by 36%.
Israel’s cybersecurity industry is demonstrating remarkable resilience, with new data showing a surge in funding despite geopolitical instability. Against the backdrop of Alphabet's (Google) landmark $32 billion acquisition of Israeli cloud security firm Wiz—the largest transaction in the country’s history—the latest Cybertech Global and IVC report reveals key trends shaping the sector.
The data underscores Israel’s position as a global leader in cybersecurity. Despite the ongoing war, Israeli cyber companies raised $3.79 billion in 2024—a 56% increase from 2023’s total of $2.42 billion. This surge in capital inflows solidifies cybersecurity as the dominant force in Israeli high-tech, continuing to attract significant foreign investment.
While the total funding volume increased, the distribution across funding stages reveals shifting dynamics. Early-stage investments grew, with 58 Seed deals in 2024—a 9.5% rise from the previous year—signaling a wave of new startups entering the market. However, the number of Series A deals dropped by 21%, and Series B deals plummeted by 36%, suggesting increasing challenges for companies seeking intermediate-stage funding.
In contrast, late-stage funding rounds (Series C and beyond) saw a sharp increase. Seven Series C deals were recorded in 2024, up 40% from the previous year, while advanced-stage rounds (Series D and beyond) also surged by 40% to 14 deals. This trend highlights the growing maturity of established companies that continue to solidify their market positions.
While fundraising has surged, the value of Israeli cyber exits has declined. In 2024, total exits amounted to $4.39 billion, marking a 37% drop from 2023’s $7.1 billion. However, the number of exit transactions increased slightly from 24 to 26, with mergers and acquisitions driving activity. IPOs remained scarce, with only one cybersecurity firm going public in 2024, a slight uptick from zero in 2023.
The data reflects broader market trends, where investors favor M&A deals over public offerings. The decline in total exit value may indicate a recalibration in valuations amid macroeconomic pressures, though sustained deal volume suggests continued demand for Israeli cyber innovation.
As of 2024, Israel is home to 546 active cybersecurity companies, up from 522 in 2023. The sector remains highly entrepreneurial, with 28% of companies employing 10 or fewer people. Most operate in the software domain (94%), with 300 companies in early revenue stages and 115 still in R&D. Another 100 firms have reached the growth stage, generating over $10 million in annual revenue.
