If you had to sum up Israel's cyber industry over the past week in one sentence: everyone is securing AI. Cyera is preparing an $800 million round at a $20 billion valuation, Sentra raised $150 million, Daylight raised $80 million and Bay, a company less than a year old, came out of stealth with $50 million. Vanta is acquiring Pillar for about $150 million, and earlier this month CrowdStrike was reported to be in talks to acquire Orion. Almost every announcement starts with the same words: AI agents, data, permissions.
There is good reason for the rush. Organizations are deploying AI agents that read email, access databases and take actions, and nobody has yet built the right defenses. This is exactly the starting point where the Israeli industry has always excelled: a new problem, frightened customers and a short window in which whoever arrives first gets the market. That is how Check Point, CyberArk and Wiz were born.
But the numbers are starting to be worrying. When dozens of startups offer similar products, a 'security layer for agents' or 'control over AI access to data,' they compete for the same customers, the same budgets and the same engineers. And the cyber giants are not waiting: CrowdStrike, Palo Alto and Check Point are adding such capabilities to their platforms, in some cases through acquisitions. A customer already paying CrowdStrike will prefer to get this protection as part of the package rather than buy another product from a startup.
The first sign of a shakeout is exit prices. $150 million for Pillar is a respectable sum, but far from the billions paid for Israeli cyber companies in recent years. This may be the start of a split: very few companies, like Cyera, will become giants, and all the rest will be sold early, relatively cheaply, to a large company that needs a team and a capability.
That is not necessarily bad. Even a $150 million exit returns money to investors, keeps a development center in Israel and lets founders start the next company. But whoever raises $50 million today at a high valuation, on the strength of a deck and a promise, should remember the bar for success has risen accordingly. When the rush calms down, and it will, the question will not be who raised the most, but who built a product customers refuse to give up.
