Israel remains the world’s cybersecurity powerhouse, whether its critics like it or not.

Israeli cybersecurity funding hits record $4.4B in 2025 as global VCs take the lead across all stages.

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Israel’s cybersecurity industry closed out 2025 with historic funding records and a clear shift in who is backing the country’s most promising startups. According to YL Ventures’ “State of the Cyber Nation 2025” report (now in its tenth year), Israeli cyber companies raised $4.4 billion across 130 rounds, the highest total ever recorded and a 46% jump in activity compared to 2024.

But perhaps the most striking milestone: For the first time, global VCs out-invested Israeli funds at every single stage: Seed, Series A, Series B, and Series C and beyond.

The findings suggest a healthy cybersecurity ecosystem that is maturing locally and sought after by the world’s top investors. Sorry to disappoint the critics, but the world can’t ignore Israeli cyber - even if it wants to.

Now, let’s take a look at some of the numbers and deals that defined this year…

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While Israel’s cyber startups continue to attract strong domestic support, 2025 marked the year that global capital became the primary engine driving the ecosystem’s growth.

US-based investors led 44 seed rounds, compared with 35 led by Israeli firms, with another 13 co-led in a “split-seed” structure, a relatively new format seeing a renewed interest. The model pairs the proximity and domain expertise of Israeli cybersecurity VCs with the scale and global reach offered by American mega-funds such as Sequoia, Greylock, Mayfield, and General Catalyst.

YL Ventures analyst Or Salom, who authored the report, said the data reflects a new phase in Israel’s cybersecurity evolution.

“This year’s data tells a compelling story of maturation and ambition,” she said. “Israeli cybersecurity entrepreneurs are no longer just building great technology; the Israeli cybersecurity ecosystem is consistently producing category leading companies at global scale.”

Early-Stage Activity Surges Post-War

Despite global economic and geopolitical uncertainty, early-stage Israeli cyber companies are booming. The report highlighted the following:

• 71 Seed rounds - up from 36 in 2023, marking a 97% increase

• 33 Series A rounds

• 17 Series B rounds

Founders are entering the market post-war with more sophisticated strategies, and investors, both domestic and global, are writing larger checks earlier.

Blue and White Consolidation: Israeli Companies Buying Each Other

2025 also saw a rise in Israeli-to-Israeli acquisitions, with 12 local startups acquired by homegrown cyber giants. According to the report, this is the most ever recorded and a sign of a maturing set of platform-scale companies.