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Israel cybersecurity sees surge in exit deals, funding struggles in 2023

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TLDR:

  • Israeli cybersecurity exit deals grew by 65% in 2023 to $7.1 billion
  • Total tech sector exits were $11 billion, down from $13.5 billion in 2022

Israeli cybersecurity exit deals saw a significant increase in 2023, reaching $7.1 billion, which accounted for more than half of the total tech sector exit deals in the country. This growth highlighted the importance of cybersecurity to Israel’s high-tech industry. The high-tech sector plays a crucial role in Israel’s economy, contributing to a significant portion of employment and exports.

The report from Cybertech Global and Israel Venture Capital (IVC) showed that funding in the cybersecurity sector, while experiencing a jump in exit deals, actually faltered in 2023. Total funding raised by Israeli cybersecurity companies in 2023 was $2.4 billion, the lowest in the past five years and down 43% from 2022. This decline was attributed to a global slowdown, investor concerns over judicial system reforms, and the conflict in Gaza.

Despite the funding challenges, Israeli cybersecurity firms remained resilient and continued to drive innovation. The country, known for its military-originated cyber firms, has established itself as a global leader in cybersecurity. The report also highlighted that geopolitical tensions have increased interest and investment in cyber companies, leading to expectations of more investments in Israeli cybersecurity companies and the emergence of new startups addressing emerging threats.

In conclusion, while cybersecurity exit deals surged in 2023, funding faced challenges. The continued growth and importance of the cybersecurity sector in Israel are crucial for the country’s high-tech industry and economy, positioning it as a key player in the global cybersecurity landscape.


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