There’s a certain frequency you start to pick up after you’ve been in this industry long enough. A kind of background hum that tells you before the headlines do where the energy is moving, where the capital is drifting, and where the next big wave is taking shape. And right now, if you tune your ear even a little, that hum is unmistakable: Israeli cybersecurity is having a moment—again—and this one feels different.

For years, we’ve grown accustomed to calling Israel the “Startup Nation,” especially in cyber. But when you look at the numbers, the exits, the early-stage velocity, and the sheer audacity of the founders coming out of Tel Aviv, Be’er Sheva and Herzliya, “startup” almost feels too small. What’s emerging now is something broader, more structural; an ecosystem that doesn’t just generate great companies, but reliably, repeatedly, industrially produces them.

And 2025 may go down as the year the world finally realized it.

A Record-Shattering Year—By the Numbers

Let’s start with the hard data, courtesy of YL Ventures’ State of the Cyber Nation 2025 report, which has become the annual pulse check for anyone serious about understanding cybersecurity’s center of gravity.

Israel recorded $4.4 billion across 130 rounds in 2025, a 46% surge in deal activity year-over-year; its strongest performance in a decade of tracking.

Let me repeat that more slowly:
$4.4 billion. 130 rounds. Nearly 50% more deals than last year.

For a global venture market still wobbling from macroeconomic headwinds, that’s not resilience—that’s acceleration.

Dig deeper and it gets even more interesting:

• Seed, Series A, and Series B all hit their highest activity levels in ten years. 
• The average Seed round climbed to $9.6 million, up from $2.9 million a decade ago: a 230% increase. 
• Growth rounds (C+) were fewer but posted the largest averages ever recorded. 
• And Israel saw a record wave of Israeli-to-Israeli acquisitions, a sign of genuine maturation—platform companies absorbing early-stage innovators to consolidate categories.
  

In other words:
This isn’t just a boom. It’s a broad-based, multi-stage, globally anchored renaissance.

And Then Came the Largest Cyber Series A in History

As if the ecosystem needed a mic drop, along comes 7AI. It’s a company barely out of stealth that raised the largest cybersecurity Series A ever recorded. It took them just 302 days from launch to making fundraising history.

If you haven’t read their story, it’s worth a look.

The significance of this round goes way beyond the size of the check:

• It signals massive confidence from top-tier global investors. 
• It shows that founders with the right pedigree and insight can still command outsized capital even in a “disciplined” market. 
• It proves—yet again—that Israeli cyber isn’t just producing companies; it’s producing category-defining companies.
  

When venture capitalists reach for superlatives, you know something shifted. This round wasn’t just a milestone—it’s another data point on a curve that’s pointing sharply upward.

Why Israel? Why Cyber? Why Now?

People ask me all the time:
“Shimmy, what’s in the water over there?”

And sure, we can talk about the obvious answers.

1. Israel is a Startup Country, Not Just a Startup Nation

In Israel, entrepreneurship isn’t a lifestyle choice—it’s a national operating system. It’s baked into the culture: Agility, urgency, improvisation, resilience. In a place where macro geopolitical conditions rarely stay stable for long, the ability to build, break, rebuild, and pivot isn’t a skill—it’s survival.

Most countries try to optimize for predictability.
Israel optimizes for possibility.

2. The IDF Factor: A Talent Engine Like No Other

Everyone knows about Unit 8200, but it’s more than a single unit. The IDF is essentially the world’s most sophisticated cybersecurity university disguised as a defense organization.

Its graduates walk out with:

• Real-world experience at a national scale 
• A mindset of offense and defense 
• A team-based problem-solving culture 
• A comfort with ambiguity and extreme pressure
  

You don’t learn that in a boot camp. There’s no certification for it. And when those people transition into civilian life, they bring with them a level of training and intuition that would take most organizations decades to replicate.

3. The “Underground Railroad” to the U.S.

It’s an open secret that many Israeli cyber companies follow a well-worn path:

• Engineering and R&D stay in Israel, where the talent density is unmatched. 
• Sales, marketing, and HQ move to the U.S., where enterprise budgets live.
  

This model works. Exceptionally well. It keeps costs reasonable, preserves innovation quality, and positions companies to scale globally from day one.

4. The VC Maturity Curve is Hitting its Stride

YL Ventures helped pioneer dedicated cyber investing between Israel and the U.S., but now?

Everyone’s there.

• Global funds anchor Seed, A, B, and C+ 
• Israeli VCs have grown in size, sophistication, and reach 
• The “split-seed” model—pairing top global funds with Israeli cyber specialists—has become the norm 
• Every major exit creates new angels, new micro-funds, and eventually new institutional VCs
  

This is how ecosystems compound. And Israel is compounding fast.

5. The Simple Reality: The Talent Is Just That Good

At some point, you have to stop trying to explain it with frameworks and just acknowledge the obvious:

Israeli cyber professionals are among the best in the world—full stop.

The ingenuity, the creativity, the willingness to challenge assumptions—it’s not just cultural. It’s generational now. They’ve built an engine that can scale itself.

Meanwhile, the Global Cyber Market is Still Expanding

All of this is happening against the backdrop of a global IT market clearing $4 trillion, where cybersecurity remains a top-three spending priority across nearly every vertical.

Let’s face it:

• Attack surfaces keep growing. 
• AI is supercharging offensive capabilities as fast as (sometimes faster than) defensive ones. 
• Enterprises still don’t have enough people, automation, or modern infrastructure to keep up.
  

This isn’t a hype cycle.
This isn’t a bubble.
This is demand. Real, structural, unrelenting demand.

And Israel—small, scrappy, relentlessly inventive—is positioning itself as one of the global centers of gravity to meet it.

Shimmy’s Take: The Train Isn’t Slowing Down

If anything, 2025 feels like another inflection point. The kind you only appreciate in hindsight.

Look at the ingredients:

• A talent pipeline unmatched anywhere on the planet 
• A VC ecosystem reaching full maturity 
• A government and cultural infrastructure that supports entrepreneurship 
• A decade of compounding exits, each one seeding the next 
• A global market hungry for cyber innovation 
• AI redefining both the threat landscape and defensive architecture 
• New founders emerging faster than investors can meet them
  

Put that together and here’s my prediction:
We’re just entering the next era of Israeli cybersecurity dominance.

Expect more mega-rounds.
Expect more category disruptors.
Expect more consolidation—and more breakaway startups right behind them.
Expect the gravitational pull of U.S. enterprise budgets to stay strong, but expect Israeli innovation to stay rooted where it grows best.

And don’t be surprised if, a year from now, we’re looking back at 2025 as the warm-up lap.

Because if there’s one thing I’ve learned watching Israeli cyber for 20+ years, it’s this:
When that ecosystem starts humming, your best move is to get out of the way—or get on board.

Either way, the train is only picking up speed.