In recent weeks, Israeli high-tech entrepreneurs have been raising unusually large sums in very early-stage rounds, amounts that until recently were mostly seen in Silicon Valley. Wonderful, which raised $34 million in a Seed round just four months ago, announced on Tuesday that it has raised an additional $100 million in a Series A round. Cybersecurity startup Tenzai, founded by the team behind Guardicore, secured $75 million in Seed funding, Majestic Labs, which develops AI infrastructure and aims to compete with Nvidia, raised $90 million. And this is just in the past week.
The answer to why entrepreneurs are now raising such large sums is simple: because they can, and because they want to. In the past, Israeli startups prided themselves on being lean, raising modest rounds and achieving far more with far less than their American counterparts. Those days are over. Today, Israeli founders understand that in the AI era, success demands massive capital, and speed.
Pavel Gurvich, one of Israel’s veteran cyber entrepreneurs who just raised $75 million for Tenzai, explained the shift to Calcalist: “When I was at Guardicore, we raised a total of $100 million, while our U.S. competitor raised $300 million. Our technology and business performance were better. But in the AI era, and especially in cybersecurity, the situation has changed. Israeli founders have proven they can deliver results, and demand is enormous. If in the past we didn’t think on the same scale as Silicon Valley, now we know we can. That’s why we raised such a significant Seed round, and we could have raised even more.”
Just a few years ago, a Series A round of $10-20 million was considered impressive. Today, even seed-stage startups, particularly in AI and cyber, can raise almost any amount they want. Competition among funds for top entrepreneurs, especially repeat founders, is intense and is driving valuations and funding rounds to new heights.
Wonderful, which develops AI agents, raised $100 million from two major investors, with Index Ventures also leading its earlier $34 million round. Global funds such as Index, Insight, Sequoia, and Greylock are approaching Israeli founders as early as the ideation stage, offering significant sums even before a product exists. Founders can now secure substantial funding to shape their venture and recruit top teams in parallel.
Another reason for the recent flood of capital is the nature of artificial intelligence itself. In this new era, speed is everything. Whereas building a company and product once took many months, startups today no longer have that luxury. They are raising large rounds to accelerate development and reach market faster.
Building in an AI environment also demands much greater capital, especially for hiring scarce talent, which is now fiercely contested worldwide. Global tech giants such as Meta and Google pay hundreds of millions of dollars for AI expertise, and in Israel too, the race for talent is driving up costs and fueling ever-larger rounds.