Israeli cybersecurity sector sees surge exceeding $7 billion in exit deals in 2023

Israel's cybersecurity sector saw exit deals soaring to $7.1 billion in 2023, marking a 65 per cent increase from the previous year, as per a report.

These figures underscored the pivotal role of cybersecurity within Israel's high-tech industry, constituting over half of the total tech sector exit deals for the year.

While the total tech sector exits experienced a slight decline to $11 billion in 2023 from $13.5 billion in 2022, the cybersecurity segment showed robust resilience and expansion. 

Cyber accounted for merely $2.5 billion of total exits in 2022, indicating a remarkable surge within a year.

Israel's high-tech sector remains a cornerstone of its economy, contributing significantly to employment, exports, tax revenue, and overall economic output. 

The country's 522 cybersecurity firms, many stemming from military backgrounds, have boosted Israel’s position as a global cybersecurity leader.

The report underscored a notable increase in exits during the first quarter of 2024, with 8 exits totaling $1 billion, further affirming the ongoing growth trajectory of the cybersecurity sector. 

Amir Rapaport, founder of Cybertech highlighted the resilience of cyber firms, attributing their success to continuous innovation despite challenging security landscapes.

Investor interest in Israeli cyber companies continues to be strong, particularly amidst escalating global cyber threats. 

Even as challenges such as a global economic slowdown and regional tensions arose, the cybersecurity sector still attract substantial investments-fostering the emergence of new startups addressing evolving threats.

In contrast to the broader tech sector, which faced funding declines in 2023, Israeli cybersecurity companies experienced a notable increase in funding during the first quarter of the year. 

Funding rounds totaling $620 million accounted for 38 per cent of the total tech funding raised, further highlighting the sector's prominence and growth potential.

(With Reuters Inputs)