Israeli Cybersecurity Gets $75M Investment Push from Merlin Ventures

Merlin Ventures has launched a second fund dedicated to Israeli cybersecurity startups, securing $75 million in funding with plans to potentially raise even more. The fund will focus on growth-stage companies seeking to scale internationally, particularly into the United States and other global markets.

Led by Managing Partners Shay Michel and Seth Spergel, alongside Merlin Group CEO David Phelps, the new fund builds on the success of Merlin Ventures’ first fund, which raised $53 million and led to notable acquisitions, including Talon Security and Dig Security both now part of Palo Alto Networks.

“From the beginning, our aim was to create an independent investment vehicle,” Michel told Calcalist. “While Merlin remains our anchor investor, demand from other backers has been overwhelming, and we’re considering increasing the fund’s size beyond the initial $75 million.”

What sets Merlin Ventures apart is not just capital it’s the strategic support it offers startups navigating regulatory and compliance complexities. Michel emphasized that in today’s climate, certifications are no longer optional. “Without the proper certifications, you’re often excluded from serious consideration especially when working with the U.S. government or Fortune 100 companies that hold government contracts,” he said.

The fund will also focus on equipping startups with infrastructure and strategic relationships from the outset. “After four years of investing in cyber, we’ve realized the traditional venture model needs to evolve,” Michel noted. “Our model offers private-equity-level engagement, because that’s what startups need to thrive today.”

This initiative reinforces Israel’s standing as a global cybersecurity powerhouse, and Merlin Ventures is doubling down on that strength by channeling resources into companies that will shape the future of digital defense.

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