Merlin Ventures today announced the successful close of its oversubscribed inaugural fund, surpassing its $75 million target, aiming to fast-track market access for disruptive seed-stage cybersecurity tech startups.

The new fund will have a strong emphasis on growing the Israeli tech ecosystem and will accelerate market opportunities for high-growth startups with next-generation cybersecurity technologies.

Since establishing an office Tel Aviv office in 2021, Merlin Ventures has achieved multiple successful exits, including Talon Cyber Security Ltd. and Dig Security Solutions Ltd., both acquired by Palo Alto Networks Inc. The firm has already made its first two investments from the new fund, collaborating with U.S. investors Lightspeed Venture Partners LP and Norwest Venture Partners LP.

Merlin Ventures differentiates itself through a strong network of U.S.-based chief information security officers, strategic co-investments with top U.S. funds and privileged access to the U.S. government market via its affiliate, Merlin Cyber. The combination offers startups technical expertise, early revenue opportunities and pathways to scale.

“The cyber startup ecosystem is incredibly strong right now, driven by demand around new threats and opportunities tied to artificial intelligence,” explains Shay Michel, managing partner of Merlin Ventures. “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.”

To support its portfolio companies, Merlin Ventures has also launched the Genesis program, a program that connects startups with market insights and operational support to accelerate product development and go-to-market readiness. The initiative is designed to help founders move swiftly from concept to first revenue, capitalizing on the evolving cybersecurity landscape.

“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,” added David Phelps, founder and chief executive of Merlin Group.

Merlin Ventures’ current portfolio includes Cynet Security Ltd., Cyolo Ltd., Cyclops DX Ltd., Centerity Systems Inc., Cynamics Ltd. and startups that don’t start with the letter c, including Tamnoon Ltd., Veriti Ltd. and Swimlane LLC. Along with Talon Security and Dig Security, other Merlin portfolio startups that have been acquired include Oxeye Security Ltd., Enso Security Ltd., Infosec Global Ltd., Cyber Observer Ltd. and Wickr LLC.

Photo: Merlin Ventures