Israel cyber companies elevate $4 billion in 2024 on surge of cloud, AI safety wants

By Steven Scheer

JERUSALEM (Reuters) – Israeli cybersecurity companies raised $4 billion in 2024, greater than double that of 2023, led by companies looking for to guard the cloud together with a surge in synthetic intelligence, world enterprise capital agency YL Ventures stated on Tuesday.

Cybersecurity has grow to be a fast-growing phase of Israel’s high-tech sector, which is a key financial development driver accounting for 20% of financial exercise, 16% of jobs and greater than half its exports.

In its State of the Cyber Nation Report, YL stated that regardless of geopolitical instability, it foresees Israel’s cybersecurity affect increasing “from a hotbed of remarkable safety options to widespread recognition of Israeli cybersecurity startups as dominant world market leaders”.

YL famous that there have been 89 funding rounds in Israel in 2024 and 50 of them had been seed, or early stage rounds, elevating a complete of $400 million. The report stated world VCs greater than doubled their funding rounds in 2024.

In development levels – so-called C and better rounds – there have been 16 rounds elevating $2.9 billion, up 300% from $888 million in 2023, YL stated. In all, Israeli cyber companies raised $1.89 billion in 2023.

“The modifications we’re observing in 2024 — world VCs investing earlier in corporations, a gap up of the seed and development spherical markets and extra acquisitions, particularly by Israeli corporations —sign a rising tide for 2025,” says Andy Ellis, associate at YL Ventures.

“Whereas the floodgates aren’t going to crash open, anticipate to see extra exercise throughout the board: A and B rounds ought to grow to be extra accessible, C and later rounds bigger and a rise in seed rounds.”

Ofer Schreiber, senior associate and head of YL’s Israel workplace, credit Israel’s elite army intelligence models for its success by creating “a no-nonsense, hands-on entrepreneurship tradition”.

He added that the warfare that started after Hamas militants attacked Israel on Oct. 7, 2023 had pressured cyber founders into a brand new actuality as many within the tech sector had been known as into army service.

“Founders wanted to rally to make sure enterprise and operational continuity in unsure financial circumstances and with a involved buyer base,” Schreiber stated.