Israeli VC firm Glilot raises $500M for AI-cybersecurity startups

Glilot Capital, one of Israel’s largest venture capital funds, has raised $500 million for two new early-stage funds targeting AI and cybersecurity startups. The successful fundraising from international investors, including U.S. and European pension funds, suggests minimal impact from geopolitical tensions surrounding Israel’s actions in Gaza on its tech investment appeal.

What you should know: The $500 million will be split between Glilot’s fifth seed fund and a new early-stage investment vehicle called Glilot Plus.

• Each fund aims to invest in 12 AI and cybersecurity startups over the coming years, with half the funding going to new investments and half to follow-on investments.
• Glilot has realized 22 investments since its founding in 2011 and now manages more than $1 billion in assets.
• The firm’s portfolio companies have already received $700 million in follow-on investment this year alone.

Investment focus: Glilot is zeroing in on the intersection of AI and cybersecurity, particularly companies that protect AI systems and defend against AI-powered attacks.

• “This (segment) is going to be bigger than cloud security,” said Kobi Samboursky, co-founder and managing partner at Glilot. “In the next five, six years we have the potential to create a lot of great companies because of this combination.”
• The strategy reflects growing concerns about increasingly sophisticated cyber attacks that leverage artificial intelligence.

What they’re saying: Samboursky, a former officer in Israel’s elite 8200 military intelligence unit, emphasized the urgency of the cybersecurity challenge.

• “Cyber hackers were increasingly using AI so we as an industry need to come up with solutions to cope with that,” he told Reuters.
• “We already are starting to see much more sophisticated attacks so we have to completely reinvent the way we protect” against them.
• “Cyber is now bigger than ever and I don’t think it’s going to end anytime soon,” he added.

The big picture: Israel has cemented its position as a global cybersecurity leader, with the sector accounting for about half of all Israeli tech startup investments.

• Recent major acquisitions underscore this dominance: Palo Alto Networks, a cybersecurity company, acquired Israeli peer CyberArk Software for about $25 billion in July, following Alphabet’s $23 billion acquisition of Israeli startup Wiz in March.
• “It’s clear that Israel is number one in the cyber domain,” Samboursky said.

Why this matters: The successful fundraising demonstrates that Israel’s tech sector continues to attract substantial international investment despite ongoing geopolitical tensions, while the focus on AI-cybersecurity convergence positions Glilot at the forefront of what many experts believe will be the next critical battleground in digital security.