Former Elron executives launch AlphaDrive, a $100M cyber and AI fund
AlphaDrive Ventures, a new Israeli venture capital firm focused on cybersecurity and AI, has launched with a $100M fund.
It was founded by Yaron Elad , former chief executive officer of Elron Ventures, and Alik Etzion , former managing partner and head of cyber investments at Elron, both of whom left the publicly listed investment firm in early 2025. The third partner is Gurinder Sidhu , an American investment banker who most recently led the cyber practice in investment banking at UBS.
The fund will invest across all stages from seed to growth, with initial cheques in the millions of dollars. It also operates a foundry model — building new companies from scratch by identifying a thesis in a cyber domain, recruiting a team, and co-founding the business alongside entrepreneurs.
Anchor investors include Leumi Partners, the investment arm of Bank Leumi, and the Kahn Family Investment Fund. Five investments have already been made, two of which have been disclosed: Shield8, a cybersecurity services roll-up being built in partnership with entrepreneurs, and Beacon Security, which is developing infrastructure for managing and analysing large volumes of security data.
AlphaDrive's thesis centres on AI reshaping the cybersecurity stack in real time. Elad has argued publicly that AI is no longer simply a technology to be protected — it is itself transforming the nature of cyber threats, with AI agents replacing human attackers as the primary adversaries enterprises must defend against. That shift, the founders argue, invalidates much of the existing cybersecurity tooling and creates an opportunity to build an entirely new generation of companies.
The fund is entering a crowded market — Israeli cyber funds include YL Ventures, Cyberstarts, Team8, Merlin Ventures, and Evolution — but its partners believe their combination of operating experience across the full company lifecycle and a foundry model for building new companies differentiates them from pure financial investors.
Israeli cybersecurity is one of the most competitive and well-funded VC categories in the world. Breaking through with a new $100M fund — modest by the standards of established players — requires exceptional deal flow and the ability to add value beyond capital in a market where founders have many options.
The foundry model is also operationally demanding: co-founding companies requires deep management bandwidth that can be stretched thin across a broad portfolio.
The fund's focus on service companies and roll-ups — acquiring and upgrading managed security service providers — is a contrarian bet in a market that has historically rewarded product companies with higher multiples. Execution risk in services businesses is higher, and scaling them requires different skills than scaling software.
AlphaDrive is part of a new wave of Israeli cyber funds built by operators rather than traditional venture investors — people who have spent careers inside the industry and are betting their domain expertise gives them an edge in identifying and building the next generation of companies.
The foundry model in particular reflects a conviction that the biggest opportunities in AI-era cybersecurity will not come from backing existing founders, but from actively constructing new companies around emerging threats.
Sources:
Calcalist
Globes
Israel.com
TheMarker
AlphaDrive Ventures, LinkedIn
Image credit:
AlphaDrive Ventures
J.V.
