Having already attracted more than $100 billion in venture capital funding, Web3 represents the present and future of decentralization – and Israel, long known for innovation across multiple technology subsectors, is rapidly staking its claim as a central Web3 hub on a global scale.
Of that gigantic $100 billion capital investment pie, Israel’s Web3 ecosystem takes around 4.5% or $4.5 billion; moreover, it encompasses 12 sectors ranging from cybersecurity to gaming and includes more than 100 start-up firms. Truly, the decentralization revolution is underway – and anyone seeking to dive headfirst into Web3’s vast potential could certainly look to Israel for leadership and innovation.
A Safer World on the Blockchain
Along with facilitating cross-border remittances and advancing the cause of financial inclusion, many Web3 firms are working tirelessly to make the world of digital assets a more secure place. In an interview with the Fear & Greed podcast, Binance CMO Rachel Conlan discussed how blockchain provides an inherently safer financial environment, “The beauty of blockchain technology is that it allows you to identify and hinder illicit activities faster than you potentially could in traditional finance. We're really proud of our efforts at Binance. Last year alone, we responded to 58,000 law enforcement requests and hosted over 120 workshops globally with local enforcement, helping to educate them on cybercrime and blockchain crime, and understanding how they can dismantle these scams.”
Of the $4.5 billion in Israeli Web3-focused venture capital funding, a $126 million swath is allocated toward risk management firms such as Solidus Labs, Sealance, and Alterya. Another $144 million in funding is dedicated to cybersecurity businesses, including Certora, Blockaid, Hexagate, and Spherex. Just to provide one example, Spherex offers to prevent “threats before they impact your smart contract”; this company reportedly once raised $8.2 million worth of funding in a single round.
Just as importantly, the subsegments of Israel’s Web3 ecosystem should be viewed as interconnected. All firms within the overarching Web3 domain – even if it’s a gaming company such as Xternity or Pink Moon Studios – will be concerned with security and risk management to some extent.
Thus, Israel’s decentralized revolution is much more than a sum of its parts. Most of all, even if some of the most exciting start-ups emerge from Israel, Web3’s scale and impact will assuredly touch all regions, segments, and populations in one way or another.
Big Funding, Rapid Growth
If start-up funding is a fair gauge of a sector’s growth, then Israel’s Web3 ecosystem is absolutely flourishing today. Tomer Niv, crypto and Web3 Investor at Entrée Capital, estimated late last year that “over the next 12 to 24 months, at least 20 Israeli Web3 startups will successfully raise Series A and B funding rounds.”
Niv further suggests that, at the current rate of venture capital (VC) funding, Israeli Web3 start-ups “could see an increase of several hundred of millions of dollars in VC funding in 2025.” It shouldn’t be too surprising, then, if many of these start-ups soon issue their own cryptocurrencies and investors quickly find them on global exchanges such as Binance.
This isn’t to suggest that all of these new Web3 firms will achieve longevity. For instance, the non-fungible token (NFT) boom and bust from a couple of years ago undoubtedly left the start-up graveyard littered with disappointments in Israel and elsewhere.
Yet, while Web3 up-and-comers will face challenges, winners will emerge and multiple stakeholders will benefit. From migrating cybersecurity operations onto the blockchain to enabling financial inclusion with cryptocurrency, the seed funding of Web3 start-ups will rapidly advance Israel’s already prominent profile as a tech talent incubator.
Profile in Web3’s Potential: Cedar Money
It’s difficult to identify any single business as emblematic of Israel as a hub of robust Web3 start-up activity. Yet, Cedar Money seems to encapsulate the spirit of growth and innovation in the global decentralized finance (DeFi) domain.
As Binance’s blog explains, Cedar Money is a payment platform founded in Tel Aviv, Israel, in 2022. The company’s platform leverages the efficiency and transparency of blockchain technology and stablecoins to facilitate cross-border transactions.
Not long ago, Cedar Money raised $9.9 million in a round of seed funding. The lead investors of Cedar Money’s latest funding round include a broad variety of firms, such as Stellar Development Foundation, Lattice, and North Island Ventures.
Surely, these investors would like to achieve substantial financial returns on their investment. At the same time, there are social implications as Cedar Money seeks to cross borders and promote inclusion from a financial viewpoint.
Even beyond the profit potential, here’s where the rubber really meets the road for Israel’s Web3 businesses. Through blockchain-based remittance modalities, Cedar Money seeks to enable “efficient money flows between emerging and developed markets”; this, the company affirms, “is particularly impactful in underdeveloped regions where traditional payment systems are cumbersome, costly, and often inaccessible.”
Only time will tell whether Cedar Money stands the test of time. Nonetheless, irrespective of how this particular start-up fares in the coming years, there’s no shortage of similar but unique Israeli Web3 businesses with forward-looking visions to empower the financially underserved.
