YL Ventures

YL Ventures is a seed-stage venture capital firm headquartered in Silicon Valley with a second office in Tel Aviv, entirely focused on backing exceptional Israeli cybersecurity founders Understanding key startup financial metrics helps founders navigate this. Since its founding, the firm has raised five funds totaling approximately $800 million under management, with its most recent Fund V closing at $400 million — the largest seed fund ever raised specifically for cybersecurity.

The firm was founded and is led by Yoav Andrew Leitersdorf, who has been investing in Israeli cybersecurity companies since the early 2000s. This nearly two-decade track record gives YL Ventures a depth of relationships in the Israeli security ecosystem that few other firms can match. The firm also maintains a formal network of over 100 CISOs who provide portfolio companies with direct access to enterprise security decision-makers.

What sets YL Ventures apart from other venture firms is its exclusivity. Unlike multi-sector VCs that dabble in cybersecurity, YL Ventures invests exclusively in security companies, and exclusively with Israeli or Israeli-American founders. This laser focus allows the team to offer domain expertise that generalist investors simply cannot replicate — including access to an in-house CTO and an advisory board of seasoned security executives.

Founders seeking YL Ventures funding should understand that the firm makes only a handful of concentrated investments per fund. This selectivity means the bar is high, but also that when YL Ventures invests, it commits meaningfully — not just with capital but with hands-on support through the full company-building journey.

The firm has a demonstrated exit track record including the sale of its stake in Axonius for $270 million, the acquisition of Medigate by Claroty, Spera Security by Okta, Aim Security by Cato Networks, Vulcan Cyber and Eureka Security by Tenable, and Enso Security by Snyk.

YL Ventures invests at the seed stage, typically as the first institutional investor in a company. The firm's investment thesis centers on a simple but powerful premise: Israeli founders building cybersecurity companies have a structural advantage due to Israel's mandatory military service, where many graduates of elite intelligence units develop deep technical expertise in security that translates directly into enterprise product development.

The firm looks for companies at the earliest possible stage — often before product-market fit has been established — and provides the resources and network needed to find it. YL Ventures evaluates investments based on three primary criteria: the quality and domain expertise of the founding team, the technical differentiation of the product, and the size and urgency of the problem being solved.

Geographic focus is Israeli founders, but not necessarily Israeli-headquartered companies. YL Ventures is comfortable with founders who build in Israel and scale globally from day one, as well as Israeli entrepreneurs who relocate to the US. The firm helps portfolio companies establish US market presence, often guiding them to establish operations in the San Francisco Bay Area.

Stage focus is strictly seed. YL Ventures writes its first check when a company is pre-revenue or just beginning to generate revenue. The firm then supports portfolio companies through follow-on rounds, often participating in Series A and beyond, but the entry point is consistently at the earliest stage.

The firm's investment universe spans the full breadth of cybersecurity: cloud security, application security, identity and access management, data security, security operations, AI security, SaaS security, and adjacent areas. YL Ventures has demonstrated willingness to invest in emerging categories — the firm was early in AI security (backing companies like Aim Security before its acquisition by Cato Networks) and offensive security (Novee in 2025).

What YL Ventures does not do is invest across multiple sectors. The firm's entire team, network, and brand are oriented around cybersecurity. Founders in other verticals should look elsewhere — YL Ventures has no interest in fintech, healthcare IT, or consumer software, regardless of how promising the team or market.

YL Ventures' Fund V, which closed at $400 million in May 2022, is the largest seed fund ever raised for cybersecurity. The firm previously raised Fund IV at $75 million in 2017, which produced its landmark return through the Axonius investment. Total capital under management across all funds is approximately $800 million.

For initial seed investments, YL Ventures writes checks ranging from $500,000 to $5 million. The lower end covers very early-stage companies — often pre-product or immediately post-prototype — where the firm provides capital to prove out a core technical insight. The upper end applies to more developed seed rounds where the company has stronger signal on product-market fit.

For Series A and later rounds involving portfolio companies, YL Ventures has the capacity to write significantly larger checks. The firm typically leads or co-leads its initial investment and remains active in subsequent rounds, though it has also brought in late-stage growth investors (as seen with Axonius' Series D and subsequent stake sale to ICONIQ Growth and Alkeon Capital).

The firm makes a concentrated number of investments per fund — a deliberate strategy that allows partners to provide meaningful hands-on support to each portfolio company rather than spreading attention thin. This is an important signal for founders: YL Ventures is not a check-writing machine but an active partner.

The fund's 2022 close came during a challenging market environment for venture capital, yet YL Ventures exceeded its initial target of $180–200 million. The firm attributed the strong fundraise to LPs recognizing the depth of the firm's Israeli founder network and the Axonius return as proof of the investment model.

In 2025, Israeli cybersecurity startups raised a record $4.4–5.1 billion across approximately 130 funding rounds, according to YL Ventures' annual State of the Cyber Nation report — the highest figure since 2021. YL Ventures participated in several of these rounds, maintaining its investment pace while becoming more selective on valuation.

New portfolio companies added in 2024–2025 include Novee (offensive security, Tel Aviv), Native (cloud security, Seattle), Opti (AI-native IAM, New York), and Hush (secretless access management, Tel Aviv). These investments reflect YL Ventures' continued focus on early-stage companies in emerging categories within cybersecurity.

The firm also saw multiple portfolio exits during this period. Aim Security was acquired by Cato Networks in 2025. Vulcan Cyber and Satori were both acquired by Tenable in 2025. Eureka Security was acquired by Tenable in 2024. Spera Security was acquired by Okta in 2024. These acquisitions reflect strong strategic interest in YL Ventures' portfolio from established security vendors looking to expand their platforms.

The Axonius exit story deserves particular attention. YL Ventures led the company's $4 million seed round in 2017 and participated through its $58 million Series C in 2020. In March 2021, the firm sold its stake to late-stage, IPO-focused investors — including ICONIQ Growth, Alkeon Capital, DTCP, and Harmony Partners — for $270 million. Axonius went on to reach unicorn status with a $1.2 billion valuation.

In the broader Israeli cybersecurity ecosystem, 2025 was notable as the first year global venture capital investment in Israeli cyber companies exceeded domestic Israeli investment — signaling the increasing internationalization of Israeli security startups and the willingness of global capital to back Israeli founders regardless of where they ultimately base their headquarters.

Axonius is YL Ventures' most famous portfolio company. Founded in 2017 by Avraham Berger, Dean Sysmor, and Ofek Shai, Axonius built a cybersecurity asset management platform that gives enterprises a single, comprehensive view of all assets across their hybrid environments. The company's system of record approach to asset management became a category-defining product, culminating in a $1.2 billion valuation and the YL Ventures stake sale in 2021. Axonius remains an independent company.

Orca Security, founded in 2019 by Avi Shua and others, built an agentless-first cloud security platform that provides comprehensive coverage across AWS, Azure, Google Cloud, and OCI without requiring any agents installed on workloads. The company's side-scanning technology changed how enterprises think about cloud security posture management. Orca raised significant growth capital from investors including ICONIQ Growth, Temasek, Redpoint, and Stripes.

Cycode, founded in 2019 and based in Tel Aviv, built an AI-native application security posture management (ASPM) platform that unifies security and development teams from code to runtime. The company was acquired by Snyk in 2023. This exit demonstrated YL Ventures' ability to identify companies addressing the growing intersection of developer tools and security.

Hunters, founded in 2019 in Tel Aviv, built an AI-driven SIEM platform with pre-built detections across identity, cloud, and endpoint data. The company raised funding from Bessemer Venture Partners, M2, and USVP, reflecting the continued demand for modern security operations platforms that challenge legacy SIEM vendors.

Grip Security, founded in 2021 in Boston, protects applications, models, and agents in AI-powered workflows. As enterprise AI adoption accelerates, Grip addresses the emerging challenge of securing AI-powered business processes — a category that barely existed when YL Ventures made its initial investment.

Valence Security, founded in 2021 in New York, provides a unified platform for SaaS discovery, SaaS security posture management (SSPM), AI security, and identity threat detection and response (ITDR). The company addresses the expanding attack surface created by widespread SaaS adoption in enterprises.

MIND, founded in 2023 in Seattle, built an autonomous data loss prevention platform that discovers, classifies, and prevents data leaks in real time. The company raised funding from Paladin, Crosspoint, and notably Okta, which later acquired Spera Security — suggesting strategic interest in the DLP space.

Recent investments also include Novee (2025, Tel Aviv, offensive security — AI platform for continuous enterprise penetration testing), Minimus (2022, New York, application security — minimal verified container images), and Miggo (2023, New York, application detection and response for cloud-native and AI-driven applications).

YL Ventures' primary investment criterion is the founding team. The firm looks for Israeli founders — often veterans of elite military intelligence units such as Unit 8200, the Israeli equivalent of the NSA — who have deep, hands-on technical expertise in security and a clear vision for the category they intend to build. Prior entrepreneurial experience is valued but not required; first-time founders with strong technical backgrounds are welcome.

Technical differentiation is non-negotiable. YL Ventures wants to see a product that does something meaningfully different from existing solutions — not an incremental improvement but a step-change in how the security problem is approached. The firm has the technical bandwidth to evaluate product architecture, code quality, and the defensibility of technical claims through its in-house CTO and advisory board.

The problem being solved must be large and urgent. YL Ventures gravitates toward security problems that enterprises are actively struggling with — where existing solutions are failing, creating obvious pain, and where a new approach can achieve rapid adoption. The firm is skeptical of solutions that address theoretical problems or require significant behavioral change from end users.

Founder coachability matters. YL Ventures takes an active role in portfolio company development, and the firm's partners expect to be engaged constructively. Founders who are defensive about feedback or reluctant to leverage the firm's network tend not to succeed within the YL Ventures portfolio.

A clear path to enterprise sales is important. YL Ventures does not invest in consumer security or small business tools — the target customer is the enterprise, typically with 500+ employees. The firm's CISO network is most valuable for companies that need to navigate complex, committee-driven purchasing processes within large organizations.

The ability to build a company, not just a product, is a distinction YL Ventures cares about. Early-stage technical founders who demonstrate awareness that go-to-market, hiring, and operations are as important as the product itself score highly in the firm's evaluation process.

Warm introductions remain the most reliable path to a first meeting with YL Ventures. The firm is most likely to engage with founders who come through portfolio CEOs, other trusted investors in the Israeli security ecosystem, or attorneys who work regularly with the firm. Building genuine relationships in the Israeli security community before pitching is a significant advantage.

The Israeli cybersecurity community is relatively tight-knit. YL Ventures' partners are embedded in this network and hear about promising new companies early. Founders who are active participants in the community — at conferences, in online forums, or through shared investors — tend to get on the firm's radar before they even formally pitch.

Cold outreach through the firm's website is possible but lower probability. If sending a cold email, the message should be exceptionally concise, clearly articulate what the company does, why the founder is Israeli, what the technical differentiation is, and why YL Ventures specifically is the right fit. Generic pitch decks that could have been sent to any VC will not stand out.

The firm's investment process typically moves quickly for seed deals that fit the thesis cleanly. Once introduced, founders can expect an initial call with a partner followed by a second meeting with additional partners. YL Ventures has been known to move from first call to term sheet in as few as two weeks for companies that are a clear fit — the Axonius seed round was reportedly closed in two weeks.

Following up after a meeting should be done without being pushy. YL Ventures partners are active investors with significant portfolio company responsibilities — persistence is appropriate but frequency should be measured. Updates on milestones, new customer logos, or product launches are the most valuable follow-up content.

Founders who are not a fit for YL Ventures at their current stage should consider staying in touch for future rounds. The firm's relationship-driven approach means that founders who made a positive impression in an initial conversation may find YL Ventures more receptive in a subsequent fundraise as their company matures.

Although YL Ventures invests at the seed stage and understands that early-stage companies have limited financial history, founders should still have a command of their unit economics, burn rate, and runway before meeting with the firm. Partners at YL Ventures are sophisticated investors who will ask hard questions about how capital will be used and what milestones the funding will enable.

For pre-revenue companies, the most important financial metric is typically the burn rate and the implied runway — how long the company can operate before needing additional capital, and what specific milestones can be achieved within that runway. Vague statements about building a great product are not compelling; concrete plans for product development, hiring, and customer acquisition are.

For companies with early revenue, YL Ventures will scrutinize revenue growth rate, gross margin, and the composition of revenue (recurring versus one-time, contract values, churn). Security companies with annual recurring revenue metrics (ARR) and strong net revenue retention are particularly well-received.

Working with a fractional CFO can meaningfully strengthen a founder's positioning in the due diligence process. Investor-ready financial models, clear explanations of how the business will scale, and realistic projections grounded in evidence signal maturity and leadership capability beyond the technical product.

Financial projections should be stress-tested. YL Ventures partners will challenge optimistic assumptions and ask founders to defend their growth scenarios. Founders who have considered downside cases and can articulate a credible plan for multiple scenarios demonstrate the kind of rigorous thinking that leads to successful outcomes.

Understanding the competitive landscape from a financial perspective — not just a technical one — is also important. Founders should be ready to discuss pricing strategy, customer acquisition costs, and lifetime value relative to acquisition cost. These metrics determine whether the business model is sustainable at scale.

Preparing to pitch YL Ventures or any top cybersecurity VC requires more than a polished deck. Founders who combine a technically differentiated product, domain-expert Israeli founders, evidence of enterprise customer traction, and command of their financials will stand out in a firm that reviews thousands of pitches to make just a handful of investments each year.

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