The cybersecurity industry is experiencing rapid growth, particularly in Israel, which has become a center for AI-focused cyber startups.

Over the past three years, at least 30 new companies have been established, driven by the increasing demand for AI-powered security solutions.

In April, Palo Alto Networks acquired Protect AI for approximately US$700 million. This was followed by Tenable’s purchase of Israel-based Apex for US$100 million in May. Cisco’s earlier acquisition of Robust for US$500 million also contributed to this trend.

U.S.-based companies such as Zscaler and F5, along with Israeli cybersecurity firm Check Point, are reportedly seeking acquisition opportunities.

At least three Israeli AI cybersecurity startups, including Prompt Security, Lasso, and Pillar, are anticipated to finalize exits in the coming months. Many of these companies, founded in 2023, are still in early growth stages. Most have completed only Seed or Series A funding rounds and are generating less than US$10 million in annual revenue.

Industry insiders indicate that acquisitions are primarily driven by the need for talent and technological expertise rather than product maturity.

Recent Palo Alto Networks developments