Israeli cybersecurity funding soars to $4.4 billion, up 46% in 2025
AI security and automation lead the surge, while global VCs anchor early-stage deals.
The Israeli cybersecurity industry had one of its strongest years in a decade in 2025, according to YL Ventures’ 10th State of the Cyber Nation report. Total industry funding set a new record at $4.4 billion, a 9% increase from 2024. Even more striking was the surge in activity: the number of funding rounds jumped to 130, a sharp 46% increase compared to the previous year.
The year was notable not only for the amount of funding but also for its breadth. The $4.4 billion represents the widest spread of capital in the last decade (excluding 2021), with more companies across more stages raising capital. Seed, Series A, and Series B rounds all reached their highest levels of activity in ten years, signaling a significant renewal in early-stage company formation. Seed rounds averaged $9.6 million (71 rounds), Series A rounds $33.1 million (33 rounds), and Series B rounds $54.6 million (17 rounds).
American and global venture capital funds strengthened their positions, becoming anchors of activity by leading most of the Seed, A, B, and C+ rounds. This trend is reflected in the "Split-Seed" model, which combines global capital with the local expertise of Israeli cyber funds.
At the growth stage, while the number of rounds remained limited, just nine, fundraising amounts were substantial, with a record average of $234.9 million per round, totaling $1.9 billion. This capital fueled not only organic expansion but also the Israeli acquisition market: a record 12 acquisitions of Israeli startups by mature Israeli companies were recorded. Growth-stage giants such as Cato Networks, Cyera, Pentera, and Armis leveraged the capital for inorganic expansion, acquiring local technologies to strengthen their competitive positions.
Entrepreneurial and investor activity increasingly focused on trends driven by artificial intelligence (AI) and automation. The leading category in new Seed-company formation was AI security, with 12 companies raising capital, followed by risk automation with 11 new Seed companies. Security Operations and Endpoint Security also saw notable growth. These sectors, which attracted the most founders and investment in 2025, are expected to produce the next generation of market leaders.
“This year’s data reflects a clear increase not only in the size and quantity of cyber investments but also in the pace, quality, and ambition of Israeli cyber entrepreneurs,” said Or Salom, an analyst at YL Ventures and author of the report. “Entrepreneurs are no longer just building breakthrough technology; they are founding companies that, from the moment they are established, aspire to lead in the most innovative categories on a global scale, reshaping the global security market.”
