After Wiz, CyberArk, and Armis, Israel’s cyber ‘royal flush’ is complete
The sale of Armis caps a record year of exits, but raises hard questions about what comes next.
It is difficult to imagine a more surprising ending to the year of crisis and depression that 2025 was for Israel than yet another exit that completes what amounts to a “royal flush” for the local cybersecurity industry. The sale of Armis is the third-largest global cybersecurity deal of the past year, preceded by two other Israeli “neighbors”: Wiz, which was sold to Google at the start of the year for $32 billion, and CyberArk, which was sold to Palo Alto Networks for $25 billion shortly after the end of the war with Iran. Against those mega-deals, Armis may appear modest, but in fact it ranks as the fourth-largest exit of all time in Israel.
The Armis transaction cements the past year as a historic record for Israeli exits, with dealmaking extending well beyond cybersecurity. Even outside the sector, the numbers would not shame a strong year: the sale of insurtech company Next for $2.6 billion to insurance giant Munich Re; the acquisition of software company Sapiens for a similar sum by Advent; the $2 billion sale of Verint to Thoma Bravo; and the $2 billion exit of fintech unicorn Melio.
In total, exits by Israeli high-tech companies surged to $80 billion in 2025. Many of these deals were signed in the first half of the year, only to be quickly overshadowed by bereavement and national grief, by missile attacks and by controversial legislation that weighed heavily on Israeli society throughout the year.
In the short term, these exits are undeniably a cause for celebration. They reaffirm the global standing of Israeli technology and talent, and help explain why companies like Nvidia have chosen to establish operations in Israel that far exceed what might be expected from an economy of its size. The proceeds also bolster government revenues at a time of extraordinary wartime expenditure, and ripple through the broader economy. Thousands of mostly young employees suddenly find themselves far wealthier, with more money to spend on restaurants, hotels, and real estate.
Yet this short-term optimism raises uncomfortable long-term questions that few are eager to confront. What happens to an Israeli company once it is sold? The oft-cited success of Mellanox under Nvidia, where the workforce nearly tripled within five years and much of the Israeli management remained in senior roles reporting directly to CEO Jensen Huang, is the exception rather than the rule. More commonly, the story is quieter and grayer, punctuated only when layoffs or cuts at multinational development centers make headlines.
While Israeli engineering talent is widely admired, management and decision-making centers often migrate abroad. Historically, most founders leave the acquiring company shortly after their three- to four-year retention commitments expire. At the time of acquisition, multinational executives pledge loyalty to the Israeli site, but in leaner periods it becomes just another location evaluated primarily through the lens of cost. The growing number of Israeli startups absorbed into global giants may also help explain the stagnation seen in recent years in local high-tech employment.
Israeli entrepreneurs are not to blame for favoring near-term certainty over long-term independence, especially given what has happened to the public markets. Nasdaq has long been regarded as the holy grail for high-tech companies, even though in practice many never reach it. In cybersecurity, the cautionary tale is SentinelOne, which went public in 2021 at a peak valuation of $9 billion and is now trading at around $5 billion. Israeli companies such as eToro, Via, and Navan, which did manage to go public this year, are all trading below their IPO prices.
This is not a uniquely Israeli phenomenon, but part of a broader shift driven by changing power dynamics between private and public capital. Private funds today control vast pools of money that are more patient, and even when they punish underperformance, they do so behind closed doors. Public markets, by contrast, have grown increasingly unforgiving, dividing companies into two camps: those perceived as AI winners and those that are not. Companies that fall into the latter category are often punished ruthlessly, regardless of growth or profitability, pushing even successful firms away from the public markets.
There is, however, another way to view the surge in exits. Large deals create a new generation of financially secure employees, people who no longer need to worry about immediate economic survival. Rather than becoming small cogs inside Google or ServiceNow, many will choose to build companies of their own. This is the path taken by Yevgeny Dibrov, founder and CEO of Armis, who was among the first employees at Adallom, the previous company founded by Assaf Rappaport and his partners, which was sold to Microsoft in 2015 for $350 million.
The future of Israeli high-tech increasingly rests on this cohort: young men and women with hard-earned experience, enough financial runway to withstand uncertainty, and firsthand exposure to what success looks like. Investors, too, favor founders who have already been part of winning companies. More than ever, the next chapter of Israeli high-tech will depend on this cycle repeating itself.
