Cyber funding hits four-year high as Israeli startups raise nearly half the global total
Global cybersecurity investment reached $5.26 billion in the third quarter of 2026, its strongest quarterly showing since 2022. Israeli startups raised at least $2.425 billion across 26 disclosed rounds, driven largely by investor demand for companies securing AI agents and infrastructure.
Israeli cybersecurity startups raised at least $2.425 billion in the third quarter of 2026, capturing an amount equivalent to nearly half of global venture capital investment in the sector. At least 26 Israeli companies disclosed funding rounds during the three-month period, as investors poured money into a new generation of startups focused on securing AI agents and the infrastructure behind them. Globally, cybersecurity funding reached $5.26 billion, its highest quarterly level since 2022, according to data from Pinpoint Search Group published by the Wall Street Journal.
The global total was nearly double the previous quarter and 78% higher than a year earlier. The Israeli figure is based on publicly disclosed funding rounds collected by CTech Data between July 1 and September 30. Two other Israeli-founded companies, Above and Zafran, backed by CrowdStrike and Cisco, also raised undisclosed amounts.
The biggest rounds of the quarter were registering by Island and Cyera. Island, which began by developing a security-focused enterprise browser, raised $400 million at a $6.4 billion valuation. The company is expanding into a broader control layer governing how employees and AI systems interact with corporate networks.
Cyera, a data-security company founded just a few years ago, also raised $400 million in September, from Goldman Sachs. The round brought its fundraising for 2026 to $1.4 billion and its valuation to more than $12 billion. Cyera is expanding beyond data protection into the management of non-human identities, including machine accounts, service credentials and autonomous software agents operating within corporate systems.
Other large rounds included $125 million for Zenity, $113 million for Onyx Security at a $640 million valuation, and $180 million for Glow, which emerged from stealth with a $1.2 billion valuation.
A common theme runs through much of this funding: securing software that can act autonomously. Of the 26 Israeli cybersecurity rounds disclosed during the quarter, roughly 20 involved companies focused on AI agents, machine identities or infrastructure designed for the AI era.
The list includes Rig Security, Arrakis Security, Hush Security, Mate Security, Way Security and Beacon Security. Many were founded within the past two years, and several had yet to publicly launch a product.
The concentration suggests that investors are placing a major bet on a relatively new security challenge. As businesses deploy AI agents that can access data, use software and carry out tasks independently, security companies are racing to control what these systems can access and what they can do.
The founders behind many of these startups are also familiar figures in Israel's cybersecurity industry. Several have returned to the market after selling previous companies, bringing experience, industry contacts and, in some cases, capital from earlier exits.
Shai Morag, who raised $60 million for Oak after selling a previous company, is one example. The founders of Epsagon, which was sold to Cisco for $500 million, returned with Harmony, an enterprise AI startup that raised $34 million from Lightspeed. Neo, founded by former SentinelOne employees, raised $100 million within months of emerging from stealth.
Arrakis Security, founded by veterans of Palantir and Torq, raised $8 million for technology designed to monitor not simply who can enter a system, but what autonomous AI systems do once they are inside.
This cycle of founders moving from one company to the next has helped build Israel's cybersecurity industry over the past two decades. The current funding wave suggests that the cycle is continuing at an unusually rapid pace, with experienced entrepreneurs and investors moving quickly to capitalize on the growth of AI.
But the scale of the investment also raises questions about how many companies the market can support. More than 20 startups are pursuing overlapping problems involving AI-agent identities, permissions and behavior monitoring. Not all will find distinct products that customers are willing to pay for, and the valuations attached to some of the rounds will be difficult to justify without substantial revenue growth.
The global figures also show that this is not exclusively an Israeli phenomenon. Cybersecurity investment is rising broadly, as investors look for opportunities created by the growing use of AI. Securing autonomous software has quickly become one of the sector's most attractive investment themes.
