How Israel Became a Global Cybersecurity Superpower

Funding and Investment: The Scale of Israel’s Lead (2024–2026)

Three separate reports illustrate Israel’s position in the global cybersecurity industry. Their figures use different methods and should be considered separately rather than combined.

Startup Nation Central reported that private funding for Israeli cybersecurity companies nearly doubled between 2023 and 2024. The funding reached a level equivalent to 40 percent of the entire US cybersecurity funding market. Cybersecurity firms represented only 7 percent of Israel’s more than 7,000 technology companies but received 38 percent of the country’s technology investment in 2024. These figures show how strongly investors have concentrated on cybersecurity within Israel’s technology sector.[1]

The annual State of the Cyber Nation report by YL Ventures recorded $4.4 billion raised by Israeli cybersecurity companies across 130 funding rounds in 2025. Funding had increased approximately fivefold over the previous decade. Foreign venture capital firms, led by American investors, invested more than Israeli funds at every funding stage for the first time. This brings capital and international commercial connections into the sector, but it also means that its continued growth depends increasingly on investors outside Israel.[2]

The trend continued in the third quarter of 2026. According to figures reported by CTech, Israeli cybersecurity startups raised at least $2.425 billion across 26 disclosed funding rounds between July and September. This represented about 46 percent of global venture investment in the sector during that period. A significant share went to companies developing security products for artificial intelligence agents and the systems supporting them.[3]

These figures demonstrate Israel’s strong position, but they do not mean that Israeli companies control the entire global market. Funding totals measure investor interest, not the complete value of cybersecurity sales, profits or employment. They nevertheless show that Israel has become an important destination for capital seeking new security technologies.

Military Intelligence as a Talent Pipeline

Military intelligence has played a major role in developing Israel’s cybersecurity workforce. Compulsory military service brings many young Israelis into the armed forces, while selective technology and intelligence units recruit candidates with strong mathematical, analytical and computing skills. Those selected gain experience working on demanding security problems before entering civilian employment or higher education.

Unit 8200, the signals intelligence unit within Israeli military intelligence, is the best-known example. Its former personnel have founded or joined companies across cybersecurity and other technology fields. Military service can provide technical training, experience working in teams, early responsibility and professional networks that continue after discharge.

A study of nearly 200 Israeli cybersecurity companies acquired over a 15-year period found that startups led by Unit 8200 alumni achieved an average acquisition value above $317 million, with a median deal value of $200 million. Companies with two or three co-founders tended to achieve higher exit values. The founders of Wiz, one of Israel’s most valuable technology businesses, came from Units 8200 and 81.[4]

Startup Nation Central also identifies international ambition and validation by foreign security customers as important features of the ecosystem.[1] Israeli founders often design products for international companies from the beginning rather than relying on Israel’s relatively small domestic market. Many consequently establish sales operations in the United States while maintaining research and development teams in Israel.

Military service alone, however, does not explain the industry’s success. The country also benefits from skilled immigrants, universities, private investment, experienced entrepreneurs and access to international customers. Military intelligence supplies a valuable starting point, but commercial success depends on turning technical knowledge into products that companies can afford, trust and use.

From Firewalls to Cloud Security: Companies That Built the Industry (1993–2026)

Israel’s modern cybersecurity industry took shape in the 1990s. Check Point Software Technologies, founded in Ramat Gan in 1993, became an early international success. Its FireWall-1 product used stateful inspection, a method that evaluates network traffic by tracking the state of individual connections. Check Point described this technology in its 1998 annual filing with US regulators.[5] The company helped establish Israel as a serious supplier of enterprise security products as commercial internet use expanded.

The industry later moved beyond network firewalls into endpoint protection, identity management, cloud security, security operations and industrial systems. This expansion allowed Israeli firms to address new risks as businesses shifted their operations online and increasingly relied on connected services.[1]

Two major acquisitions in 2026 illustrate the sector’s reach. On March 11, Google announced that it had completed its acquisition of Wiz, a cloud and artificial intelligence security platform. Wiz joined Google Cloud while retaining its brand. The $32 billion transaction was described as the largest deal in the history of Israel’s technology sector.[6][7] It reflected the growing importance of protecting cloud infrastructure and AI-related systems.

The second major transaction involved CyberArk, an Israeli-founded company specialising in privileged access and identity security. Palo Alto Networks announced that it had completed the acquisition in February 2026. Its filing with the US Securities and Exchange Commission described CyberArk’s technology as covering human, machine and AI-agent identities.[8] The transaction was valued at approximately $25 billion and represented the largest acquisition in Palo Alto Networks’ history. The company also said it would seek a secondary share listing on the Tel Aviv Stock Exchange under CyberArk’s ticker, CYBR.[9]

Such deals bring money, international exposure and experienced entrepreneurs back into the Israeli ecosystem. Founders and employees may establish new businesses, while large technology companies gain access to specialised Israeli research and development teams. But acquisitions also create a strategic trade-off: Israel benefits from the success of companies founded there, while ownership and some commercial decision-making may move to multinational corporations.

Building the National Cyber Shield (2002–2026)

Israel’s cybersecurity capabilities extend beyond private companies. The state has gradually developed a central system for protecting government networks, critical infrastructure and essential services.

The first major step came in 2002, when the government assigned the National Information Security Authority responsibility for protecting vital computer systems. In January 2012, Israel established the Israel National Cyber Bureau, reporting directly to the Prime Minister. Its legal basis was Government Resolution No. 3611, adopted on August 7, 2011, under the title “Advancing National Cyberspace Capabilities.”[10][11]

On February 15, 2015, the government adopted further resolutions establishing the National Cyber Security Authority to lead operational defence. The Bureau and the Authority were subsequently brought together within the Israel National Cyber Directorate (INCD), which coordinates national cyber defence and preparedness.[10]

The scale of the threat helps explain why this institutional structure matters. According to reporting on the INCD’s 2025 annual report, its National Cyber Emergency Center handled approximately 26,500 incident reports that year, an increase of 55 percent over 2024. Phishing accounted for 52 percent of reported incidents. During Operation Rising Lion against Iran in June 2025, reports rose 75 percent above the monthly average.[12]

Microsoft’s 2025 Digital Defense Report also placed Israel third globally for cyberattacks in the first half of 2025, accounting for 3.5 percent of reported global incidents. The report found that approximately 64 percent of Iranian state-linked cyber activity worldwide targeted Israel.[13] In June 2026, INCD Director-General Yossi Karadi reported about 4,800 hostile incidents, compared with approximately 1,600 in June 2025. He said Israel had successfully defended its critical infrastructure to that point.[14]

These figures underline an important distinction: a country’s cyber strength is measured not only by its exports and startups, but also by its ability to protect hospitals, utilities, financial services, government systems and other essential infrastructure. Israel’s experience shows how a persistent security threat can encourage investment in both public defence and private innovation. The same movement of skilled personnel between military units, government agencies and commercial firms can also help transfer defensive knowledge into new products.

India and Israel: Partners in Cyber Defence (2014–2026)

India and Israel have developed cybersecurity cooperation through government agreements, operational exchanges and commercial partnerships. A homeland security agreement in February 2014 identified cybercrime as an area for cooperation. A dedicated cybersecurity memorandum of understanding followed in 2018 during Prime Minister Benjamin Netanyahu’s visit to India. In July 2020, the INCD and India’s Computer Emergency Response Team, CERT-In, signed an agreement covering information exchange, incident response and possible joint exercises. The first India–Israel Cyber Policy Dialogue took place in 2025.[15]

The relationship advanced during Prime Minister Narendra Modi’s visit to Israel on February 25–26, 2026. The two countries raised their relationship to a “Special Strategic Partnership for Peace, Innovation & Prosperity.” Their joint statement described Israel as a global technology and innovation centre and India as a source of talent, manufacturing capacity and entrepreneurial energy. It committed the two governments to a multi-year cybersecurity programme covering workforce development, artificial intelligence, applied research, security-by-design principles and regular joint tabletop exercises.[16]

The leaders also welcomed a Letter of Intent to establish an India–Israel Centre of Excellence in Cybersecurity in India. The agreement involved India’s National Critical Information Infrastructure Protection Centre (NCIIPC) and the INCD. The proposed Centre is intended to support cybersecurity cooperation, including annual simulations. The two governments also backed cooperation between their financial-sector incident response teams.[15][16]

Private-sector links complement this government framework. Check Point has announced its first Asia-Pacific research and development centre in Bengaluru, with a focus on AI-driven threat detection. Indian firms such as Redington distribute Check Point products to small and medium-sized businesses, while Bharti Airtel offers Radware products to customers.[15]

The partnership offers complementary advantages. Israeli firms bring specialised technologies and experience in developing products against sophisticated threats. Indian organisations can contribute a large technical workforce, extensive digital infrastructure, service delivery and access to a major market. Effective cooperation will depend on turning agreements into sustained training, research, operational readiness and products suited to Indian institutions.

In One Paragraph

Israel became a global cybersecurity leader through the combination of military intelligence training, entrepreneurial networks, government investment and early commercial successes such as Check Point. Its companies now compete in cloud security, identity protection and AI defence, attracting billions of dollars in funding and major international acquisitions. At the same time, Israel has built national institutions to defend critical infrastructure against persistent cyberattacks. Its growing cybersecurity partnership with India brings together Israeli technical expertise and Indian talent, infrastructure and market reach. Sustaining this position will require more than funding and successful exits: Israel must continue producing effective technology, protect its own essential systems and address the legal and ethical questions raised by surveillance tools.

Sources

1. Startup Nation Central. “Israel’s Cybersecurity Sector Surges, Secures 40% of US Funding Total Despite Geopolitical Tensions.” Press release, PR Newswire, July 15, 2025. https://www.prnewswire.com/il/news-releases/israels-cybersecurity-sector-surges-secures-40-of-us-funding-total-despite-geopolitical-tensions-302505612.html
2. “Israel’s Cyber Industry Funding Hit New Records in 2025.” The Jerusalem Post, December 2025. Reporting on YL Ventures, State of the Cyber Nation 2025. https://www.jpost.com/business-and-innovation/article-880029
3. “Israeli Cyber Startups Attract Nearly Half of All Global Sector Funding.” Jewish News (London), October 2026. Reporting on CTech data for the third quarter of 2026. https://www.jewishnews.co.uk/israeli-cyber-startups-attract-nearly-half-of-all-global-sector-funding/
4. “From Unit 8200 to Wiz’s $32B Exit: The Blueprint for Israeli Cyber Success.” Calcalist (CTech), March 2025. https://www.calcalistech.com/ctechnews/article/sjltwsk2kg
5. Check Point Software Technologies Ltd. Annual Report (Form 20-F), 1998. Item 1, “Industry Background” and description of Stateful Inspection. https://www.checkpoint.com/downloads/investor/1998-CHKP-form-20F.pdf
6. Thomas Kurian. “Welcoming Wiz to Google Cloud: Redefining Security for the AI Era.” Google Cloud Blog, March 11, 2026. https://cloud.google.com/blog/products/identity-security/google-completes-acquisition-of-wiz
7. Calcalist (CTech). Report on the closing of Google’s acquisition of Wiz, March 11, 2026. https://www.calcalistech.com/ctechnews/article/s10031lgc11x
8. Palo Alto Networks, Inc. “Palo Alto Networks Completes Acquisition of CyberArk to Secure the AI Era.” Exhibit 99.1 to Form 8-K, US Securities and Exchange Commission, February 2026. https://www.sec.gov/Archives/edgar/data/1327567/000119312526045600/d40626dex991.htm
9. “Palo Alto Networks Completes $25B Acquisition of CyberArk for Identity Security Push.” CRN Asia, February 2026. https://www.crnasia.com/news-network/2026/palo-alto-networks-completes-25b-acquisition-of-cyberark-for-identity-security-push
10. Israel National Cyber Directorate, Prime Minister’s Office. Israel National Cyber Security Strategy in Brief. Jerusalem, 2017. Section “Development of Israel’s National Cyber Security Efforts” and page 15, “Establishing a Central Cyber Security Authority.” https://en-sectech.tau.ac.il/sites/bog.tau.ac.il/files/bog/media_server/cyber%20center/SADNA%20ENG/Israel%20Cyber%20Security%20Strategy%20-%20Brief%20-%20English%20-%20Book%20-%20Final%20-%202017.pdf
11. Government of Israel. Resolution No. 3611, “Advancing National Cyberspace Capabilities,” August 7, 2011. Unofficial English translation. National Security Archive, George Washington University. https://nsarchive.gwu.edu/sites/default/files/documents/3346587/Document-05-Government-of-Israel-Resolution-No.pdf
12. The Jerusalem Post. Report on the Israel National Cyber Directorate Annual Report 2025, 2026. https://www.jpost.com/israel-news/defense-news/article-887964
13. “Israel under Fire in Massive Global Cyber Offensive, Microsoft Report Warns.” Ynetnews, October 2025. https://www.ynetnews.com/tech-and-digital/article/sjgbsc06ee
14. Reuters. “Iran Cyberattacks on Israel Surged in 2026, Israeli Cyber Chief Says.” Republished by Al-Monitor, June 29, 2026. https://www.al-monitor.com/originals/2026/06/iran-cyberattacks-israel-surged-2026-israeli-cyber-chief-says
15. Rohit Kumar Sharma. “Mapping India–Israel Cybersecurity Cooperation.” Issue Brief. Manohar Parrikar Institute for Defence Studies and Analyses, April 6, 2026. Sections “Engagement at the Government Level,” table 1, and “Private Sector.” https://idsa.in/publisher/issuebrief/mapping-india-israel-cybersecurity-cooperation
16. Prime Minister’s Office, Government of India. “India–Israel Joint Statement.” February 26, 2026. Sections “Together into the Future” and “Cybersecurity.” https://www.pmindia.gov.in/en/news_updates/india-israel-joint-statement/