• Merlin Ventures raises a $75M debut fund to back seed-stage cybersecurity startups, with a focus on Israeli innovation and AI-driven threat defense.
  • Zero Networks secures $55M Series C, highlighting strong investor appetite for proactive cyber defense tools amid rising global threats.

Merlin Ventures, an Israeli-American venture capital firm, has raised $75 million for its first fund, which will support cybersecurity firms in their growth stages.

The oversubscribed fund, which was revealed on 4th June 2025, demonstrates the strong investor confidence in Merlin's aim to foster cutting-edge cybersecurity solutions, with an emphasis on growing the Israeli tech ecosystem and expediting market access for high-potential businesses.

The fund, which is run by Merlin Group CEO David Phelps and Managing Partners Shay Michel and Seth Spergel, focuses on seed-stage companies that have next-generation technology to combat changing cyberthreats, particularly in light of AI developments and more stringent compliance requirements.

In order to encourage innovative cybersecurity solutions, Merlin Ventures has already made its first two investments, collaborating with American companies Lightspeed Venture Partners and Norwest Venture Partners.

The launch of the new fund coincides with a surge in demand for cutting-edge cybersecurity solutions due to the growing sophistication and frequency of cyberthreats.

Known as the "Start-up Nation," Israel is leading the way in this innovation, with many businesses creating state-of-the-art cybersecurity systems.

An excellent illustration of this tendency is the Series C fundraising round for Tel Aviv-based cybersecurity startup Zero Networks.

Highland Europe is leading Zero Networks' $55 million Series C fundraising round, with F2 Venture Capital, PICO Partners, Venrock, and USVP also participating.

This investment, which raises the company's total capital to over $100 million, demonstrates the growing demand for proactive defenses that can keep attackers out of the system even after a breach has occurred.

With six successful exits from its previous $53 million fund, including the acquisition of Dig Security and Talon Cyber Security by Palo Alto Networks and the recent sales of InfoSec Global to KeyFactor and Veriti to Check Point, Merlin Ventures has established a solid track record since opening its Tel Aviv office in 2021.

The firm stands out for its hands-on approach, providing startups with infrastructure, strategic support, and access to a strong network of CISOs situated in the United States, in addition to funding.

The Genesis Program, an accelerator-style effort created by Merlin Ventures to accelerate startups from concept to revenue by utilizing market insights, operational assistance, and AI-driven development trends, was introduced to further strengthen its portfolio.

As the cybersecurity landscape changes quickly, Merlin Ventures wants to strengthen its position as a catalyst in the sector by enabling businesses to develop internationally and address important concerns.

Edited by Harshajit Sarmah