Israeli cybersecurity company Cyera informed employees last week that it is acquiring Israeli startup Shape AI, a small company founded by entrepreneurs Daniel Eisenberg, Eden Gaon, and Ariel Schon. Shape AI, which was in stealth, raised $5.5 million before the acquisition, from IBI's high-tech fund and Mensch Capital, a relatively unknown venture capital fund. Mensch Capital is managed by serial entrepreneur and investor Boaz Shedletsky, and its investors include Wiz CEO Assaf Rappaport and former Hippo CEO Assaf Wand.
This is the second acquisition of an Israel startup by Cyera, which raised $60 million in its seed round three years ago and is currently raising $500 million at a company valuation of $6 billion. Cyera acquired Trail Security last year for $162 million.
The amount Cyera is paying for Shape AI has not been disclosed but market sources estimate it is for several tens of millions of dollars, which will be received by investors, founders and employees in Cyera shares and options and generous salary offers. The deal is a hiring acquisition in which one of the aims is to buy a talented team of employees suitable for developing a new product at Cyera in the identity management field and leading development the field of cloud activity analysis, with the original product developed by Shape AI being closed and not transferred to the buyer.
Among Shape AI's entrepreneurs and employees are former members of special intelligence units such as the 81st National Intelligence Center (CINC) and members of the prestigious IDF Intelligence Corps – the type of employees most in demand in the cybersecurity industry today.
Shape AI had changed its focus in the two years it has been operating. The company was founded as a smart inventory management system for retail chains, and then the product focus shifted to cloud infrastructure.
Partners from top funds
The Mensch Fund behind the company may not record the return it expected from the investment, but the deal sheds light on its existence. This is a fund in which Harel Insurance is the anchor investor, which was also joined, by Rappaport and Wand, as well as several managing partners in top funds such as Andreessen Horowitz and Peter Thiel's Founders Fund.
Rappaport and Wand do not manage the fund's investments, but they have invested their personal capital and sometimes meet with and support the portfolio companies.
The fund was raised and is managed by Boaz Shedletsky, a serial entrepreneur and co-founder of Sternum, who served as VP of the American education corporation McGraw-Hill. Shedletsky began his journey as a private investor and, after achieving several successes, decided to raise $30 million for his first fund, with Harel Insurance as an anchor investor.
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He is now raising another fund that could reach $50 million. So far, the fund in question has raised $25 million after an initial closing last year.
According to US venture capital fund database PitchBook, the fund has made at least 18 investments to date, including in supply chain management company Hexight, AI defense sector company Wisery Labs, digital marketing management system Addressable, and AI accounting company Safebooks.
Published by Globes, Israel business news – en.globes.co.il – on June 11, 2025.
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