Backed by Walmart and Cisco, Israel’s Team8 raises $365m to help build AI startups

Israel’s Team8, a venture capital group that develops and spins out tech companies, has raised $365 million in fresh funds to invest in local startups and founders who build infrastructure and software to securely manage the adoption of artificial intelligence workloads.

The funding, which is backed by investors including Walmart, Cisco, Moody’s, AT&T, SoftBank and Temasek, brings Team8’s total assets under management to almost $2 billion, the venture group said on Wednesday. Among the new investors is Indian IT service provider giant Infosys.

Out of the fresh capital, $265 million was raised for Team8’s third venture capital fund, which will target seed investments and Series A rounds of about 16 Israeli-founded AI startups working across cybersecurity, software infrastructure, fintech and digital health.

The fund has already invested in Israeli cybersecurity startup Koi Security, which was acquired earlier this year by Palo Alto Networks for an estimated $400 million. Another $100 million will be earmarked for follow-up investments in existing portfolio tech startups, Team8 said.

“AI is fundamentally rewriting the economics of company building,” said Team8 Managing Partner Sarit Firon. “Building world-class software required years of engineering, significant capital and exceptional technical talent — today, a remarkably small team with access to frontier models can build in weeks what once took years.”

“As AI capabilities continue to evolve at a pace none of us has seen before, competitive advantage won’t come from the model underneath a product; it will come from solving fundamental enterprise problems that stay relevant across technology cycles,” Firon noted.

Team8 said the new fund will target founders building AI-centric infrastructure, identity, data and security software, as AI agents are embedded in workflows faster than businesses can safely absorb the change.

“As AI accelerates change and creates real uncertainty across every enterprise, the biggest opportunities sit in the infrastructure and cybersecurity layers that let enterprises adopt this technology with confidence,” said Team8 co-founder Liran Grinberg.

The Tel Aviv-based venture group typically invests $5 million to $10 million in each startup. Exits include the sale of Talon Cyber Security and Israeli startup Dig Security to Palo Alto Networks for a combined $1 billion. Among its investments are Classiq, a software developer for quantum computing; Sygnia, which was sold to Temasek; Claroty; Illusive Networks and Hysolate.

Nadav Zafrir, a former commander of the Israeli army’s tech and intelligence Unit 8200, founded the Team8 venture group in 2014 with 8200 veterans Grinberg and Israel Grimberg. Its investors also include Microsoft, Nokia and Barclays.