Venture investors are pouring money into Israeli cybersecurity startups. The latest is Vega, a company coming out of stealth mode that has landed $65 million in funding to take on some of the biggest incumbents in security.
The funding round, led by Accel with participation from Cyberstarts, Redpoint, and CRV, values Vega at $400 million.
The funding comes as Google is trying to close its $32 billion acquisition of Wiz, another Israeli-founded security firm, in what could be one of the largest cybersecurity deals ever.
Vega’s cofounder and CEO, Shay Sandler, knows the comparison is inevitable.
“It’s quite humbling to say that it’s similar,” he said. “We were bold enough to chase a very big problem without being too apologetic about it.”
Funding for Israeli security startups nearly doubled last year from 2023, reaching a level equal to 40% of the entire US cybersecurity funding market, according to data from Startup Nation Central.
Like the Wiz founders, Sandler and his cofounder Eli Rozen are alumni of Unit 8200, the Israeli elite intelligence unit that has produced some of the country’s most successful tech entrepreneurs.
Vega already has 63 employees spread across Israel and the U.S., including offices in San Francisco, Miami, and New York, where Sandler recently relocated. The company says it has already signed Fortune 20 companies, major banks, and a global top-10 healthcare organization.
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Vega is entering a crowded space, competing with legacy systems like Splunk and Palo Alto Networks’ QRadar. Other startups, such as Sumo Logic, Exabeam, and Panther, are also pitching themselves as faster, cheaper alternatives.
Vega says it can compete by offering a simple pitch: traditional security systems are too slow and too expensive. Big companies rely on them to find attacks before they cause damage, but those tools often require massive amounts of data to be shipped into one place. Vega claims it can give security teams faster answers by looking at information where it already lives, instead of forcing it all into one system first, cutting down on wasted time and costs and stopping hackers sooner.
“Our unique architecture really enabled us early on to provide value to the biggest customers, and this kind of shocked venture capitalists because they had never seen something like it in this domain,” Sandler said.
For Accel partner Andrei Brasoveanu, backing Vega was about both the team and the size of the opportunity.
Aside from AI, VCs are more excited about cybersecurity than any category right now because companies need to spend heavily to guard against ever-evolving threats, according to Brasoveanu.
“The number of attackers and the sophistication of attackers are only increasing,” he said, adding that he realizes $400 million is an ambitious valuation for such a young company.
“Our business is relying on power law type outcomes and we need to take these big swings,” Brasoveanu added. “It’s a team that’s moving at a very fast pace, already landing large enterprise customers. I’m incredibly excited about them.”
