Sequoia Israel AI Investments Surge with New $200M Fund

Sequoia’s latest move in Israel comes at a moment when global investors are still trying to understand how the country’s tech sector can thrive during a war. Yet the firm’s new $200 million Seed fund shows that its conviction has only grown stronger. And inside Sequoia, no one has become a louder champion for the region than partner Shaun Maguire, who has spent much of the last year traveling back and forth between Tel Aviv and Silicon Valley. His belief is simple: Sequoia Israel AI investments represent one of the biggest opportunities in the firm’s global strategy.

Maguire has emerged as a central voice in support of Israel since the start of the Gaza conflict. Despite not having a name that immediately signals his connection, he has strong personal ties to the country and has used his platform to speak publicly throughout the war. He even helped coordinate Elon Musk’s high-profile visit to Israel shortly after the October 7 attacks, a moment that drew intense attention across the tech world.

That visibility has also generated tension inside the firm. Reports surfaced that Sequoia COO Sumaiya Balbale resigned because she believed the firm should have responded more forcefully to some of Maguire’s public statements, including remarks he made about a New York mayoral candidate. Sequoia has not commented on internal disagreements, but the firm is moving forward with its largest wave of early-stage commitments since the war began.

The new $200 million Seed fund will target startups at their earliest stages, and Maguire says a meaningful share will be directed to founders building in Israel. Alongside it, Sequoia also unveiled a larger $750 million vehicle designed for Series A companies. Although the firm raised a similar Seed fund in 2023, the size is intentional. Sequoia believes smaller Seed funds allow partners to focus on fewer companies and help them more deeply, a philosophy that has shaped its track record for decades.

That structure sits within a far bigger investment engine. Between its core $20 billion fund and broader global vehicles, Sequoia now oversees roughly $56 billion in assets. But when it comes to Sequoia Israel AI investments, scale isn’t the goal. Precision is.

Maguire says the firm’s strategy in Israel has not shifted during the war. Instead, it has accelerated. He points to new partner Dean Meyer, who joined the Seed effort and quickly relocated to Israel after October 7. Maguire himself has spent nearly half the year in the country, arguing that physical presence matters when supporting founders during uncertain times. He says these decisions send a clear message about Sequoia’s long-term commitment to the region.

Although Sequoia does not operate with strict geographic divisions, its recent Seed funds tell a clear story. Roughly 20% of the capital has gone to companies based in Israel or founded by teams with deep Israeli roots. That share is notable because Israel represents a small slice of the global market but commands a large share of engineering talent, especially in cybersecurity and AI.

Maguire points to Sequoia’s long history in the region. The firm was an early investor in Mellanox, which Nvidia later acquired for $7 billion, and in Palo Alto Networks, founded by Nir Zuk. More recently, Sequoia placed early bets on cloud security powerhouse Wiz, which was acquired by Google for $32 billion. These wins form the backbone of Sequoia Israel AI investments, and the firm plans to stick to the same early-stage playbook.

Sequoia intentionally limits how many investments each partner makes. Maguire says partners typically make no more than three new investments per fund because the work involved goes far beyond writing a check. Partners help with product strategy, hiring senior executives in the U.S., refining go-to-market plans, and opening doors that seed-stage founders can’t access alone. That “fewer, deeper” model remains core to the new fund.

About 70% of Sequoia’s Israeli deals have been at the Seed or early stage. The remaining 30% come from growth rounds, which the firm approaches more selectively. Even so, not all of its biggest wins are public. Maguire shares that Sequoia recently completed three undisclosed investments: two in cybersecurity companies and one in a data-focused startup.

Some of its best-known bets, however, have already become global stories. The most prominent is Decart, an AI startup founded by Dean Leitersdorf and Moshe Shalev, which has skyrocketed to a valuation of $3.1 billion in under two years. Sequoia led Decart’s $21 million Seed round and doubled down in later rounds, helping push the company to $156 million in total capital. Decart has become a symbol of how strong Sequoia Israel AI investments can scale, even in turbulent times.

Another standout is Eon, a data-backup company that became a unicorn within a year after its $20 million Seed raise. There is also Kela, a defense-tech startup that raised $100 million in its first year and has quietly become one of the fastest-growing companies in the sector. These deals often put Sequoia ahead of local competitors who might normally lead them. But with foreign funds reducing their Israeli activity during the war, Sequoia’s willingness to keep investing created more room to secure top-tier allocations.

Maguire doesn’t worry about competition returning once the conflict ends. In his view, more competition benefits founders and the ecosystem. He argues that every time Sequoia invests a dollar in a company, other investors often follow and amplify that momentum. That dynamic, he says, is part of what makes Israel’s tech ecosystem resilient.

Cybersecurity has long been a core pillar of Sequoia’s strategy in Israel. The firm has backed leaders like Wiz, Island, Cyera, and Zafran. Yet Maguire says the local market is now seeing stronger teams emerge outside cybersecurity, especially in AI and data-driven software. More Israeli entrepreneurs are exploring new categories, and that shift is influencing the direction of Sequoia Israel AI investments. Even so, he disagrees with the idea that cybersecurity valuations are inflated. As proof, he notes that Sequoia quietly made two new cyber investments this year.

But the biggest shift is the explosion of AI startups. Maguire says Israel is positioned better than most countries to lead in AI because the skills that define elite AI teams, deep math, systems engineering, algorithmic thinking, overlap with cybersecurity expertise. He believes the country’s technical DNA gives it an edge.

He points out that before the ChatGPT moment, very few AI companies were being built in Israel, even though the talent was there. Figures like Ilya Sutskever, one of OpenAI’s founders, and Noam Shazeer, a pioneering figure recruited by Google for $2.5 billion in compensation, are proof of that deep expertise. After the breakthrough of generative AI, Israeli founders began forming new AI companies at record speed.

Decart may be a global outlier, but Maguire says it won’t be alone for long. He believes 10 to 20 early Israeli AI startups already have the potential to compete on a world stage. They are simply too young for the public to see their trajectory yet. That number forms the foundation of Sequoia Israel AI investments over the next decade.

Maguire ends on a clear prediction. Israel, he says, is ideally positioned for the AI era. Many assume the country has missed its moment, but he argues the opposite. In his view, the next five years will reveal how strong Israel’s AI ecosystem really is. And he believes Tel Aviv could become the world’s third major AI hub after San Francisco and Beijing.

That confidence, combined with Sequoia’s aggressive Seed strategy, signals that Sequoia Israel AI investments will continue shaping the region’s tech landscape long after the war ends.