Cybersecurity

The state of Israel’s cybersecurity market

The Equifax breach, WannaCry, NotPetya, the NSA leak, and many more cyber incidents – 2017 was certainly a busy year for hackers, illustrating yet again just how vital innovative cybersecurity solutions are in the fight against cyber threats.

Second only to the U.S., in terms of cybersecurity investment 2017 was another excellent year for Israeli cybersecurity startups, with dozens of companies being formed, breaking fundraising records and producing solid exits. The 2017 data also suggest that the Israeli cybersecurity industry is maturing, as we see a shift in funding towards later stage companies.

In 2017 we witnessed 60 newly founded cybersecurity startups emerge in Israel, a 28% decrease from the 83 companies founded in 2016. Conversely, the average 2017 seed round increased 16% YoY, growing from $2.85 million to $3.3 million. This is Israel’s fourth consecutive year of increasing round sizes at the seed stage – a trend that we are observing and contributing to as we write larger checks to invest in great cybersecurity entrepreneurs.