Israeli Cyber Sector Breaks Record With $4.4 Billion Raised in 2025 marking a historic year

Israel’s cyber industry is marking a historic year, with $4.4 billion raised across 130 investment rounds in 2025, according to the annual State of the Cyber Nation report by Israeli-American venture capital firm YL Ventures, which manages roughly $800 million and specializes in cybersecurity investments.

The new figures reflect a 500% increase compared to 2015, underscoring the sector’s rapid global rise and Israel’s central role in the cybersecurity innovation ecosystem.

Growth-stage companies dominate 2025 funding

Most of the capital flowed into companies in accelerated growth stages:

• Series C: $1.88 billion

• Series B: $930 million

• Series A: $960 million

• Seed rounds: $650 million

The report highlights dramatic growth in early-stage financing:
The average Seed round soared 230%, from $2.9 million a decade ago to $9.6 million today. The annual number of Seed rounds more than doubled — climbing from 31 to 71.

Overall, the number of investment rounds rose from 72 in 2015 to 130 in 2025 — an 80% increase.

Global VC funds overtake Israeli investors at all stages

In a major shift, 2025 marks the first year in which global venture capital funds overtook Israeli funds at every investment stage, including Seed.

• 44 Seed rounds were led by major American funds

• 35 Seed rounds were led by Israeli funds

Prominent U.S. investors driving early-stage activity include Sequoia, Mayfield, Greylock, and General Catalyst, all of which significantly increased their activity in the Israeli cyber sector.

Record number of local acquisitions

The report also documents a record year for domestic exits, with 12 Israeli cyber companies acquired by other Israeli firms — the highest number recorded to date.
The trend reflects the maturation of the cyber ecosystem and the rise of Israeli companies as strategic buyers rather than only acquisition targets for global corporations.

A decade of accelerated growth: 2015–2025

Published on the report’s tenth anniversary, the data paints a picture of a sector that has expanded consistently across economic cycles.
According to YL Ventures, Israeli cyber has evolved into one of the world’s most influential innovation hubs, shaping global security technologies and attracting top-tier investors.”

Yovav Leitersdorf, Managing Partner at YL Ventures, noted:

“Over the past decade, our report data indicates consistency: in all market conditions, the Israeli cyber industry continues to expand, strengthen, and stay ahead of global trends.

The scale of investments, the pace of company building, and the quality of the teams position Israel as one of the most influential innovation engines in the world.”