Cyber Trends: Israeli Innovation in 2024

2024 Takeaway: Israeli Cybersecurity Innovation Differentiates and Defines Itself as a Global Leader

‍In 2024, the Israeli cybersecurity startup scene firmly established itself as a force both within the “Innovation Nation” and globally. There’s been a wholesale maturation of the cyber ecosystem with multiple sources of entrepreneurial talent coming online, a growing and more diversified investor base, and positive trends in both cyber startup valuations and exits.

We also noted a cultural shift in ambitions. Five years ago, many cyber companies were founded in Israel with the intent to be acquired by larger platforms. Now, there are companies, such as Wiz – one of the most impressive tech companies in the past few years, globally – but also Fireblocks, Island, Cyera that aim to become large, independent global companies of consequence.  

‍2024 cybersecurity investment values outpace non-cyber tech investment in Israel

‍Israeli cyber startups raise more and are more highly valued than their non-cyber tech counterparts. Considering early-stage investment (seed to Series B), Israeli cybersecurity companies accounted for 35 investment deals worth nearly $555M USD – nearly half of the $2.13B raised in 214 deals by Israeli enterprise tech startups overall in 2024. That’s just over 16% of the deals for more than a quarter of the investment dollars. Looking at valuations, those cyber companies earned a median post valuation of $44.6M versus $31.94M for the non-cyber sect.

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The acquirees are becoming the acquirers

‍On the exit front, companies founded in Israel have accounted for seven of the top 10 cyber acquisitions this year by exit value. Traditionally the acquirees, Israeli cyber companies hit the board three times on this list as the acquirers. Wiz bought Gem Security for $350 million and then Dazz for $450M. Perhaps even more notable was Israel-founded CyberArk buying Salt Lake City-based Venafi for $1.54B.

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In total, venture-backed Israeli cybersecurity companies saw more than $2B in exits in 2024, demonstrating the sector's continued ability to generate substantial returns and attract strategic buyers.

A broadening talent pool

‍In the last year, Israel has seen new streams of talent, collaboration, and funding energizing its security startups. Military intelligence units like the 8200 group remain key in producing top cyber talent but experienced folks are departing cyber unicorns and established platforms with substantial local teams such as Microsoft, Palo Alto Networks, and CrowdStrike to start new/join companies. And there’s a uniqueness to the talent assets in Israel. These are people who can not only solve hard technical problems, but are also exceptional at working in teams and delivering under pressure. 

With this concentration of talent plus a strong synergy between academia, entrepreneurship, multinational corporations, and venture capital, the ecosystem excels at identifying and building new categories. See: Cloud Security Posture Management (CSPM) and Data Security Posture Management (DSPM), as well as emerging areas like Data Loss Prevention (DLP) and AI-driven Security Operations Center (SOC) Automation.

Resilience

The remarkable resilience we’re seen in productivity, innovation, and technical leadership despite current challenges underscores that Israeli cybersecurity has truly come into its own in 2024. The shout out belongs to the many Israeli entrepreneurs who, despite everything, continue to start and scale healthy businesses. 

Yair Snir
Deepak Jeevankumar
Barrel Kefir