Merlin Ventures announced the closing of its oversubscribed inaugural fund, exceeding its $75 million target. And with a strong emphasis on the growing Israeli tech ecosystem, this landmark fund advances market opportunities for high-growth startups with next-generation cybersecurity technologies and disruptive cyber solutions.
This fund underscores the confidence in Merlin Ventures’ unique model and ability to identify and nurture high-potential, seed-stage cybersecurity startups. Merlin Ventures Managing Partners Seth Spergel and Shay Michel, along with Merlin Group CEO David Phelps ,will manage the fund.
Promotions: Merlin Ventures is also announcing the promotion of two longtime team members who have been key to the fund’s success: Almog Golod to Partner and Tav Spector to Operating Partner. Business leaders invested in and support the fund, including Ofer Smadari, founder of Torq; Ofer Ben-Noon, founder of Talon Security (acquired by Palo Alto Networks); Dan Benjamin, founder of Dig Security (acquired by Palo Alto Networks); and Lior Suchard (world-famous mentalist).
Exits: Since building out a team in Israel in January 2021, Merlin Ventures has successfully exited six investments made from previous vehicles, including Talon and Dig Security, both acquired by Palo Alto Networks, and more recently, InfoSec Global, acquired by Keyfactor, and Veriti, acquired by Check Point Software. And the new fund has already made its first two investments, alongside leading U.S. investors Lightspeed Venture Partners and Norwest Venture Partners.
Core Pillars: The firm’s fundraising success is driven by three core pillars:
1.) Robust Network – A community of hundreds of top Chief Information Security Officers (CISOs) and security executives across the U.S. who provide invaluable market insights, assist in due diligence, and accelerate the growth of portfolio companies.
2.) Strategic Co-Investment Partnerships – A unique model of co-investing with prominent U.S. funds, positioning Merlin Ventures as a go-to partner for accessing premier seed-stage Israeli cybersecurity talent. This enables the firm to invest ahead of the curve while giving startups the support of two top funds—a huge competitive advantage.
3.) Government Market Access – A strategic relationship with Merlin Group, a leading player in the U.S. federal market, provides portfolio companies with an accelerated pathway into the lucrative U.S. government market.
KEY QUOTES:
“Raising our first dedicated fund, especially in today’s economic climate, is a testament to the incredible work our team has done over the last four years and the unique value proposition we offer to both founders and investors. This new fund allows us to double down on our commitment to seed-stage companies and positions us as the go-to partner for the Israeli cybersecurity ecosystem and for U.S. investors eager to invest in the Israeli market.”
Seth Spergel, Managing Partner, Merlin Ventures
“The cyber startup ecosystem is incredibly strong right now, driven by demand around new threats and opportunities tied to Artificial Intelligence. We are witnessing a new generation of startups leveraging generative AI to build platforms at scale that were previously unimaginable, and capitalizing on this growth is the foundation of our fund. Our investment track record is a testament to our unique market access and deal flow inside the Israeli market, which positions the firm to identify and support the most promising founders. We are laser-focused on making this new fund the most successful seed-stage cyber fund in the Israeli market.”
Shay Michel, Managing Partner, Merlin Ventures
“Merlin provides portfolio companies with a powerful network of cybersecurity investment, innovation, technical expertise, and go-to-market acceleration that leverages world-class security technologies and trusted relationships to facilitate and deliver trailblazing security solutions. Over the past four years, Merlin Ventures has proven itself as a VC with key differentiators that enable us to succeed where others have failed. Our unique model of co-investment allows us to build strong partnerships with some of the most recognized funds in the world. This new fund will amplify our ability to connect visionary entrepreneurs with the resources, network, and expertise they need to scale globally.”
David Phelps, Founder and CEO of Merlin Group
