YL Ventures, the Silicon Valley venture capital firm specializing in seed-stage investing in Israeli cybersecurity startups, today announced it has closed its fourth fund with $120 million of committed capital. YLV IV was significantly oversubscribed, and closed with a combination of current YLV investors and select new ones. Fund IV brings the total capital under YLV management to $260 million.
The YLV IV strategy will be consistent with that of previous funds, aiming to build a concentrated portfolio of top-tier seed stage cybersecurity companies out of Israel. Generally investing in only 2-3 teams each year, YLV IV will target a total of 10 companies, allowing the firm to maintain its dedication to true value-add investing.
YL Ventures leads seed investment rounds with multimillion checks, while continuing to invest throughout follow-on rounds, which are typically led by top U.S. investors, including Bessemer Venture Partners, U.S. Venture Partners, ICONIQ Capital and TenEleven Ventures.
YL Ventures’ focus on cybersecurity allows it to conduct a rapidly efficient evaluation process, while supporting each of its companies, both strategically and tactically, across a number of functions post-investment. The firm is uniquely focused on supporting early stage companies’ U.S. go-to-market by leveraging its vast network of industry experts, hundreds of CISOs and U.S.-based technology companies which are prospective customers and acquirers of its portfolio businesses.
YL Ventures advisory board
YL Ventures has built out a venture advisory board comprised of over 50 security professionals from leading multinationals. The board includes such cybersecurity luminaries as:
- Andy Ellis, (CSO, Akamai)
- Adam Ely (Deputy CISO, Walmart)
- Brooks Evans (Director of Security, Netflix)
- Rob Guertsen (Deputy ISO, Nike)
- Roger Hale (CISO, Informatica)
- Stacey Halota (VP Information Security & Privacy, Graham Holdings Company)
- David Hannigan (Head of Security, Spotify)
- George Kurtz (CEO & Founder, CrowdStrike)
- Kurt Lieber (CISO, Aetna)
- Sherry Ryan (CISO, Juniper Networks).
This strategy has proven highly effective, consistently delivering top quartile returns to its Limited Partners. YLV has invested in 16 companies to date, 8 of which have been successfully acquired.
Prominent exits include Twistlock (acquired by Palo Alto Networks), Hexadite (acquired by Microsoft), Blazemeter (acquired by CA), and FireLayers (acquired by Proofpoint).
Uniquely focused approach
Heading the fund is Silicon Valley-based Managing Partner Yoav Andrew Leitersdorf, a serial entrepreneur and early stage investor for over 25 years. Yoav works alongside Partner John Brennan in the U.S., while Partner & Head of Israeli Office Ofer Schreiber leads the Tel Aviv office together with VP marketing Sharon Seemann.
With a team of 12 spread across two offices, YL Ventures has engrained itself in both the U.S. and Israeli cybersecurity ecosystems.
The firm credits much of its success to its uniquely focused approach. Today, enterprises struggle to secure rapidly advancing technology, in particular as the pace of innovation around cloud computing and IoT accelerates. Cybersecurity has become a board-level concern and global cybersecurity software/services spend projected to reach $124B in 2019, according to Gartner.
While Israeli cybersecurity entrepreneurs come to the table with world class technical skills and domain knowledge and expertise, much of which is acquired at the Israel Defense Forces, YL Ventures aims to complement these unique capabilities with its dual centers of gravity and access to the U.S. market. With its presence in Tel Aviv and Silicon Valley, YL Ventures bridges the gap between Israeli innovation and U.S. end markets, supporting its companies as they go to market, raise follow-on capital, and scale into market leaders.
“One of the most challenging aspects of being an Israeli entrepreneur is crossing over from Israel to the U.S., and actually meeting your prospects and understanding your market,” explained Jonathan Langer, CEO of YLV portfolio company Medigate. “The support and introductions provided by YL Ventures are incredibly valuable, providing immediate and unbiased feedback that’s crucial for the success of the company.”
YLV advisors in the U.S. also see value in its model. “There is a lot of noise in the security market these days. For me, YL Ventures is a signal amidst all that noise, with a highly differentiated view into the Israeli cybersecurity market,” noted Adam Ely, VP, Deputy CISO at Walmart. “The teams that I meet through the YL Ventures network are of the highest quality and help me both address my problems of today and keep an eye on what might be around the corner.”
YL Ventures has high expectations for the fourth fund. “As with previous funding efforts, the YLV IV fund will be extremely selective, investing in only the most promising Israeli startups tackling the biggest cybersecurity challenges facing the industry,” said Leitersdorf. “We then go the extra mile to make our portfolio companies successful, nurturing nascent technologies and products, and leveraging our hard-won network of CISOs and C-suite executives in the U.S.”
The current YLV portfolio includes Karamba Security (embedded security for connected systems); Axonius (cybersecurity asset management); Medigate (cybersecurity for medical devices); Vulcan Cyber (continuous vulnerability remediation); Hunters.ai (AI-powered autonomous threat hunting) and the most recent one, Orca Security (full-stack cloud security visibility), founded by the former CTO of Check Point Software.