Merlin Ventures Research
Investment Thesis
Merlin Ventures is a cybersecurity-focused venture capital firm established in 2021 as the venture arm of the Merlin Group. The firm partners with ambitious founders building the next generation of AI-native cybersecurity companies, with a specific emphasis on the Israeli cyber ecosystem. Merlin's thesis centers on the idea that AI is simultaneously creating new attack surfaces and new opportunities for defenders, and that Israeli founders (many with elite military and intelligence backgrounds) are best positioned to build the category-defining security companies of this cycle. The firm distinguishes itself from generalist VCs through a deep operator network built specifically for cybersecurity go-to-market.
Sector Focus
Merlin invests exclusively in cybersecurity, spanning:
- AI-native security operations and SOC automation
- Identity security and management
- Cloud security, posture management, and compliance
- Data security and protection (DSPM)
- Insider risk management
- Post-quantum cryptography
- Browser and endpoint security
- Hardware and IoT/supply-chain security
Stage Focus
Merlin's core mandate is seed-stage investing in Israeli cybersecurity startups, with selective participation in later rounds (Series A through Series D) as portfolio companies scale and go through follow-on growth rounds alongside larger co-investors.
Check Size
Not publicly disclosed. Given the $75M fund size and a portfolio of 15+ active companies plus reserves for follow-ons, initial checks are likely in the low-to-mid six figures at seed, consistent with a specialist seed fund.
Lead Tendency
Unclear from public sources. Merlin frequently co-invests alongside larger multi-stage funds (Lightspeed Venture Partners, Norwest Venture Partners) on its newest deals, suggesting a collaborative, syndicate-oriented posture rather than a strict lead-only mandate.
Recent Activity
Merlin closed an oversubscribed $75M inaugural fund in June 2025, its second Israel-focused vehicle, aimed at backing seed and growth-stage cybersecurity startups expanding into the U.S. and global markets. As part of the fund close, the firm promoted Almog Golod (Director to Partner) and Tav Spector Levi (Head of Business Development to Operating Partner), and launched the Genesis Program, an accelerator-style initiative to help portfolio companies move from idea to revenue faster. The new fund has already deployed capital into two investments alongside Lightspeed Venture Partners and Norwest Venture Partners. In January 2026, portfolio company Torq raised a $140M Series D at a $1.2B valuation to scale its AI SOC platform and expand into the U.S. federal market.
Portfolio Highlights
Active portfolio spans 15+ companies including Torq (Series D, AI-native security operations), Cyolo (Series B, zero-trust network access), Swimlane (Series B, security automation/SOAR), Finite State (Series B, IoT/supply-chain security), Sepio (Series B, hardware security), Tamnoon (managed cloud remediation), Cynamics (network detection and response), Above Security, Neo Security, Clutch, Jazz, Native, Huskeys, and Qiz.
Notable exits: Talon Cyber Security (acquired by Palo Alto Networks, December 2023), Dig Security (acquired by Palo Alto Networks, December 2023), Enso Security (acquired by Snyk), Oxeye (acquired by GitLab), InfoSec Global (acquired by Keyfactor), Veriti (acquired by Check Point), and Wickr (acquired by AWS).
Team
- David Phelps, Founder and Managing Partner
- Shay Michel, Managing Partner
- Seth Spergel, Managing Partner
- Almog Golod, Partner (promoted from Director, June 2025)
- Tav Spector Levi, Operating Partner (promoted from Head of Business Development, June 2025)
- Dorin Danay, Business Operations Manager
- Rachel Mitchell, Business Development Manager
- Tomie Shirin-Bitton, Business Development Manager
- Noa Toledano, Business Operations
Decision Process
Investment decisions run through the partnership, led by Managing Partners Shay Michel and Seth Spergel alongside Merlin Group CEO David Phelps, with Partner Almog Golod involved in sourcing and diligence.
Founder Preferences
Merlin backs technical founders building AI-native cybersecurity products, with a strong preference for Israeli founders (frequently with military intelligence or elite technical unit backgrounds) targeting the U.S. and global enterprise/public-sector markets. The firm's value proposition centers on go-to-market support: a network of 100+ CISOs and practitioners, dedicated labs for secure development, government access programs, and curated events (including its own Cyber Safari conference in Denver) to help founders build credibility and pipeline in the U.S. market.
Geographic Focus
Merlin is headquartered between Tel Aviv, Israel and Tysons Corner, Virginia, reflecting its core strategy: source seed-stage cybersecurity startups in Israel and help them expand into U.S. commercial and federal markets.