Israeli cyber firms secured $4 billion in 2024 driven by cloud and AI security demand

Israeli cybersecurity companies raised $4 billion last year, doubling the previous year’s total with companies that offer cloud security needs and AI growth, as per YL Ventures. This was a big jump in overall global venture capital investments and put Israel at the forefront of cybersecurity innovation.

Cybersecurity is at the center of it all. According to Reuter’s report, the Israeli cybersecurity sector contributed 20% to the economy, 16% to jobs, and over half of its exports for the year.

YL Ventures’ “State of the Cyber Nation Report,” published on Wednesday, indicated that Israel is becoming influential, and even if it faces geopolitical challenges, its startups will move from being strong contenders to becoming global leaders.

Israel’s growth stage rounds raised $2.9 billion in 2024

Israel recorded 89 funding rounds in 2024, including 50 early-stage rounds of fundraising, of which $400 million were raised.

Dramatic increases were seen in growth stage rounds (Series C and beyond), with 16 rounds raising $2.9 billion, three times the 2023 total of $888 million raised by 68 rounds. By comparison, 2023’s total funding for cyber firms was $1.89 billion.

Also, in the statement, YL Ventures partner Andy Ellis noted that global VCs are ready to invest in much earlier rounds, enabling seed rounds to continue in force and increasing growth-stage investments. He anticipates that Series A, B, and C rounds will be picked up in 2025.

According to Ofer Schreiber, head of YL’s Israel office, the practical, entrepreneurial culture is credited in part to Israel’s elite military intelligence units. Still, he said that challenges remain after the October 7, 2023 Hamas attack.

He said, “Founders needed to rally to ensure business and operational continuity in uncertain economic conditions and with a concerned customer base” without the usual contingent of tech professionals being called to military service.