Cybersecurity firms raised $4 billion in 2024, more than double that of 2023, led by firms seeking to protect the cloud along with a surge in artificial intelligence, global venture capital firm YL Ventures said on Tuesday.
Cybersecurity has become a fast-growing segment of the hi-tech sector, which is a key economic growth driver accounting for 20% of economic activity, 16% of jobs, and more than half its exports.
In its “State of the Cyber Nation” report, YL said that despite geopolitical instability, it foresees Israel’s cybersecurity influence expanding “from a hotbed of exceptional security solutions to widespread recognition of Israeli cybersecurity start-ups as dominant global market leaders.”
YL noted that there were 89 funding rounds in Israel in 2024, and 50 of them were seed, or early-stage rounds, raising a total of $400 million. The report said global VCs more than doubled their funding rounds in 2024.
In growth stages – so-called C and higher rounds – there were 16 rounds raising $2.9 b., up 300% from $888 m. in 2023, YL said. In all, the cyber firms raised $1.89 b. in 2023.
A rising tide for 2025
“The changes we’re observing in 2024 – global VCs investing earlier in companies, an opening up of the seed and growth round markets and more acquisitions, especially by Israeli companies – signal a rising tide for 2025,” says Andy Ellis, partner at YL Ventures.
“While the floodgates aren’t going to crash open, expect to see more activity across the board: A and B rounds should become more accessible, C and later rounds larger, and [there should be] an increase in seed rounds.”Ofer Schreiber, senior partner and head of YL’s Israel office, credits Israel’s elite military intelligence units for its success by creating “a no-nonsense, hands-on entrepreneurship culture.”
He added that the war that began after Hamas terrorists attacked Israel on October 7, 2023, had forced cyber founders into a new reality, as many in the tech sector had been called into military service.
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