Israel's cybersecurity withdrawal agreement surges, funding slows in 2023, ET Telecom

Written by Stephen Scheer

JERUSALEM: Israel's cybersecurity withdrawal agreement will increase by 65% ​​to $7.1 billion in 2023, more than half of the total amount of the high-tech withdrawal agreement, a report showed on Sunday. importance was emphasized.

Total exits in the tech sector through mergers and acquisitions, initial public offerings and takeovers were about $11 billion last year, down from $13.5 billion in 2022.

Cyber ​​will account for 2022 total exits, according to a report released by Cybertech Global and data and research firm Israel Venture Capital (IVC) ahead of the Cybertech Global Conference in Tel Aviv this week. The proportion is said to be only $2.5 billion.

The high-tech sector drives Israel's economy, accounting for 16% of jobs, more than half of Israel's exports, a third of its income taxes, and almost a fifth of its overall economic output, according to Bank of Israel data. ing.

Many of Israel's 522 cyber companies originate from the military, making Israel a global cybersecurity leader.

There were 24 exits in all of 2023, compared to eight exits totaling $1 billion in the first quarter of this year, the report said.

Cybertech founder Amir Rapaport said cyber companies are resilient even in tense security situations and serve as an anchor for Israeli innovation.

“As global cyber threats increase year by year, the trend of increasing mergers and acquisitions in Israel's cyber sector that began last year will continue until 2024,” he said. “In contrast to other sectors, geopolitical tensions are increasing interest and investment in cyber companies. Therefore, we expect to see more investment in Israeli cyber companies and start-ups that address emerging threats. It is expected.”

According to IVC, tech startups raised $6.9 billion in 2023 across 393 rounds, down from $15.7 billion in 2022, but the decline was due to the global economic slowdown and domestic in Gaza, believed to be due to investor unrest over judicial reform plans and the outbreak of war.

Israeli cyber companies raised $2.4 billion in 2023, the lowest number in five years and a 43% decrease from 2022.

The cybersecurity sector stood out in the first quarter, with total funding rounds reaching $620 million, accounting for 38% of the total technology funding raised, Sunday's report said.