Raising for a cybersecurity startup in Israel: dos, don'ts and the gap between seed and Series A

The short answer: Israeli cyber is the most heavily funded early-stage category in the country, and seed rounds have grown to about $9 to $10 million on average. That money comes with a higher bar for the next round. Series A investors now look for paying US customers, renewals and a repeatable sales motion, and many seed-funded companies take two years or more to get there, if they get there at all. Raise for the milestones the Series A will require, start selling in the US early, and plan the 18 months after the seed as carefully as the seed itself.

The market in numbers

Trackers count cyber rounds differently, so we name the source next to each figure.

Measure	Figure	Source
Cyber seed rounds, 2025	75 rounds, average about $9.5M	YL Ventures, State of the Cyber Nation (January 2026)
Cyber Series A rounds, 2025	34 rounds	YL Ventures
Cyber Series A capital, 2025	About $1.1B across 37 rounds, more than double 2024	Cybertech and IVC, via Ynet (January 2026)
Seed, all sectors, H1 2026	Median $10.1M; $8.0M without five outliers; cyber led by count with 10 deals at a $9.0M median	VC Cafe (June 2026)
Series A, all sectors, H1 2026	Median $24.5M; cyber was 15 of 34 deals	VC Cafe
Cyber, Q3 2026	At least $2.4B across 26 disclosed rounds, about 46% of global cyber funding	CTech (October 2026)

Two trends stand out. Foreign investors now take part in more Israeli cyber seed rounds than Israeli funds do: YL counts 46 seed rounds with global participation in 2025, against 37 with Israeli VCs. And the AI era is reshaping the category: CTech counted about 20 of the 26 Q3 2026 rounds in AI agents, machine identity or AI infrastructure.

Many big "seeds" are two rounds at once

Headlines about $50 to $60 million "seeds" can distort expectations. Many of these are a seed and a Series A disclosed together on the day a company leaves stealth. Gambit Security announced $61 million combined in February 2026, Jazz $61 million in March, Fig Security $38 million, and Act Security $60 million, split into a $20 million seed and a $40 million Series A. These companies usually have serial founders and prior relationships with the funds. If you are a first-time team, VC Cafe's advice is to target a seed of about $7 to $12 million rather than the headline median.

The gap between seed and Series A

The path from seed to Series A has become longer everywhere:

• It takes longer.Carta reports that the median company that closed a Series A in 2025 had waited about 2.1 years since its seed, up from 1.5 years five years earlier. In Carta data analysed by SaaStr, 39% of companies now take three years or more.
• Fewer companies make it.No seed cohort since the third quarter of 2021 has reached a 30% Series A graduation rate within two years, according to Carta.
• Bridges are common.About 29% of seed and Series A deals on Carta in 2025 were bridge rounds.

For cyber specifically, a recruiting firm, Trident Search, estimates that about 80% of seed-funded cyber startups never reach a Series A, with Israeli companies graduating at a higher rate than US ones (34% against 24%) and larger seeds graduating more often. Its methodology is not published, so read this as a direction rather than a precise figure.

What Series A investors look for

The revenue bar keeps rising. In 2021, YL Ventures described about $500,000 in ARR and at least ten paying customers around 18 months after the seed as a baseline for a cyber Series A. That is now a floor, not a target: Carta's Peter Walker has noted that $1 million in ARR, which opened Series A conversations in 2021, may only open seed-stage conversations today. What investors look for:

• Paying US customers.Design partners matter, but the round is decided by how many converted to paid contracts, and how fast.
• Renewals and expansion.Evidence that customers stay and grow is now weighed alongside new revenue.
• A repeatable sales motion.A clear buyer, usually the CISO or a team under them, a known sales cycle, and deals that do not depend on the founders' personal network.
• A category that is growing.A product that rides a budget line security teams are already funding, such as AI security or identity, is easier to fund.

Dos

• Raise for the next round's milestones.Work backwards from what a Series A lead will need to see, and budget the seed to reach it with six months of buffer.
• Sell in the US early.Cyberstarts founder Gili Raanan has argued that starting in the US is the simplest and least risky route, because it is the largest market with the deepest pool of investors. Plan for a US-based go-to-market leader before the Series A.
• Turn design partners into contracts.Agree in advance what success looks like in a pilot and what it converts into.
• Pick investors who will fund the next round.A split seed, with a US fund alongside an Israeli cyber specialist, is increasingly common: YL counted 14 in 2025.
• Track the metrics an A investor will ask for.ARR, logo count, pilot-to-paid conversion, sales cycle length, net retention and burn multiple.

Don'ts

• Don't anchor on the headline numbers.A $50 million stealth launch is not the benchmark for a first-time team.
• Don't raise too much at a valuation you cannot grow into.A large seed at a high price raises the bar for the Series A and makes a flat or down round more likely if growth is slower.
• Don't treat pilots as revenue.Unpaid pilots that never convert are one of the most common reasons companies stall after the seed.
• Don't blur advisor and buyer roles.CISO advisors can be valuable for product and introductions. Keep any compensation transparent and separate from purchasing decisions; this has been a source of public controversy in the Israeli market.
• Don't wait until the last six months of runway.Start Series A conversations while you still have time to choose.

If you are stuck between seed and Series A

1. Diagnose honestly. Is the issue the product, the buyer, the market timing or the sales motion? Speak with customers who did not convert.
2. Narrow the focus. One buyer, one use case, one segment, where you can show a repeatable win.
3. Extend the runway with intent. An insider bridge works best when it funds a specific milestone that changes the Series A story.
4. Get closer to the US buyer. If sales still run through the founders in Tel Aviv, that is often the gap.
5. Keep strategic options open. Talk early with potential partners. A small, well-run company has more options than one negotiating with three months of cash.

For the round mechanics, see our guides to raising a seed round in Israel and the SAFE and dilution calculator.

Where Velo fits

Many of the hardest problems between seed and Series A are company-building problems: choosing the first market, turning pilots into revenue, and building the story for the next round. Velo's venture studio works with a small group of pre-seed and seed teams on exactly that, every week. See how the studio works.

Sources

1. YL Ventures, State of the Cyber Nation, 10th edition (January 2026)
2. Ynet, Israeli cyber raised a record $8.27 billion in 2025 (Cybertech and IVC, January 2026)
3. VC Cafe, What Israeli founders need to know about raising in H2 2026 (June 2026)
4. CTech, Israeli cyber funding in Q3 2026 (October 2026)
5. Carta, State of Private Markets: 2025 in review
6. Carta, Seed to Series A: still an uphill battle (February 2026)
7. SaaStr, Your seed round now needs to last 3 years (November 2025)
8. Carta, ARR requirements for Series A are rising (April 2025)
9. TechCrunch, YL Ventures on Series A benchmarks for cyber startups (August 2021)
10. CTech, Gili Raanan on building in the US (September 2024)
11. The Trident Radar, cyber seed-to-Series A graduation (February 2026)
12. SecurityWeek, Jazz emerges from stealth with $61M (March 2026)
13. Globes, Fig Security emerges from stealth with $38M (March 2026)
14. CTech, CISO compensation at Cyberstarts (June 2024)