Cyberstarts Venture Capital Seeks Additional Tel Aviv Office Tower

Venture capital firm Cyberstarts is reportedly in the market for another office building in Tel Aviv, signaling continued appetite for real estate in the city. This follows the firm's recent lease of 15 floors in the Landmark 2 tower in Tel Aviv's Sarona complex, a move designed to consolidate its portfolio companies into a single campus.

Founding partner Gili Ra'anan and partner Dor Kenfou are in discussions with several real estate companies to explore options. These could include a purpose-built tower for Cyberstarts or available floors in other under-construction buildings like TOHA2 and Spiral Tower. The Landmark 2 tower, expected to be occupied in about a year, will house nine of Cyberstarts' 25 portfolio companies.

Larger companies within the portfolio, such as Island Technology, Upwind, and Cyera, will remain in their existing offices, including the first Landmark tower. The companies relocating to the new cyber campus are smaller, employing between 100 and 200 people, and have recently secured significant funding rounds. These include Glow, Vega, A, Onyx, Surf, and Spirit, all experiencing rapid growth.

Cyberstarts itself will occupy part of one floor in the new tower, which will serve as a shared campus hub featuring amenities like a gym and cafe. While startups can customize their office spaces, infrastructure will be standardized to reduce costs. The firm manages $1.4 billion in assets.

In April, Cyberstarts signed a lease agreement for 22,400 square meters in Landmark 2. The remaining 13 floors are leased by Wiz, a former portfolio company acquired by Google. The upper floors of the tower are designated for 116 residential apartments. The Landmark 1 tower also hosts significant Cyberstarts companies like Cato Networks, Tenable, and Cyera, suggesting the area is becoming a 'cyber hub'.

The strategy behind consolidating companies aims to alleviate the challenges young, growing firms face with frequent office moves or the need for additional space. The consolidated lease also secures better terms, with portfolio companies estimated to pay about 20% less than market rates, though they will pay rent directly to the building owners. Ra'anan noted that demand for space exceeded availability at Landmark 2, citing the continued growth of cybersecurity talent and the limited impact of AI on workforce demand. He anticipates Cyberstarts will become the largest tenant in Tel Aviv with multiple towers.