Israel’s cybersecurity sector booms with $8.27b funding, $72.6b exits in 2025

Israel’s cybersecurity sector wrapped up 2025 on an historic high, recording unprecedented fundraising levels and a dramatic spike in exit values, according to new figures released by Cybertech Global and IVC ahead of the Cybertech Global Tel Aviv 2026 conference, which opens Monday at Expo Tel Aviv.

According to The Jerusalem Post, the report shows total exit value reached approximately $72.6 billion – including transactions signed but not yet finalized – marking an increase of more than 1,500% from 2024. Fundraising also surged to a record $8.27 billion, nearly doubling year-on-year from $3.96 billion in 2024 and surpassing the previous peak of $7.5 billion set in 2021.

The report underscores cybersecurity’s central role in Israel’s tech economy, showing that despite little change in deal volume, average deal size climbed sharply, doubling to roughly $60 million.

It was revealed that early-stage investment has tightened, with seed rounds declining from 71 to 63. At the same time, funding shifted toward more mature companies, as Series A and B rounds expanded significantly.

Series A activity rose by nearly one third, and the capital invested in those rounds more than doubled. Growth was even stronger at the Series B level, which saw sharp increases in both the number of deals and total investment.

Later-stage rounds came to dominate the market, accounting for more than $5.4 billion in funding.

While Series C rounds dropped steeply – falling to three deals from seven the year before – activity in later-stage rounds remained broadly stable, with 13 deals in 2025 versus 16 in 2024.

The report showed that most of the jump in exit value can be traced to three outsized transactions by Wiz, CyberArk, and Armis, signed in 2025 and still pending completion. Stripped of those deals, exits would have totaled about $2 billion – just under last year’s figure. However, the underlying market remained active, with exit counts climbing from 27 to 32, suggesting sustained momentum for mergers and acquisitions.

Israel’s cybersecurity ecosystem continued to expand in 2025, with the number of active companies rising to 597 from 546 a year earlier.

Most firms remain small, employing up to 20 people. At the same time, 185 companies are now mid-sized, and 90 employ more than 100 workers, underscoring the sector’s gradual maturation.

The industry remains overwhelmingly software-driven. Nearly 93% of companies focus on software or enterprise infrastructure solutions, while hardware and semiconductor ventures continue to occupy only a marginal share of the market.

Cybertech Global Tel Aviv 2026, organized in cooperation with the National Cyber Directorate, multiple government ministries, the Tel Aviv–Yafo Municipality, and Ben-Gurion University of the Negev (BGU), is expected to attract thousands of participants from Israel and overseas.

The conference will address a wide range of topics, including the convergence of AI and cyber defense, quantum technologies, cloud security, healthcare innovation, and both national and international cyber strategy, alongside cyber entrepreneurship and related fields.

Expected speakers include Prime Minister Benjamin Netanyahu, President Isaac Herzog, National Cyber Directorate head Yossi Karadi, NVIDIA Israel Managing Director Nati Amsterdam, Wiz Co-founder Yinon Costica, BGU computer science student and former Israeli hostage Noa Argamani, and E.N.P. Israel chair Esti Peshin.