Israel's tech industry is demonstrating resilience and a potential path to recovery despite recent challenges, according to recent data and expert analysis.
In the second quarter of 2024, Israeli tech startups achieved remarkable financial success, raising an impressive $2.9 billion across 110 fundraising rounds, as reported by LeumiTech and IVC. This milestone represents the highest funding level in two years, highlighting a robust recovery trajectory amidst ongoing national hurdles.
Compared to the first quarter of 2024, funding surged by an impressive 78%, with a substantial 47% increase from the same period last year. Notably, Wiz, a leading cybersecurity firm, secured a historic $1 billion investment at a valuation of $12 billion, marking the largest funding round ever recorded in Israel.
The quarter also saw a notable increase in major deals, with six transactions exceeding $100 million each, significantly boosting the overall funding landscape.
Despite earlier setbacks, including the aftermath of the Gaza conflict and domestic controversies, foreign investment in Israeli tech has shown signs of resurgence after a brief decline. This positive trend suggests renewed confidence in the stability and growth potential of Israel's tech ecosystem.
However, there are emerging concerns. Calcalist, a prominent Israeli business news outlet, reports a growing trend of new startups opting to register outside of Israel. This shift could potentially skew investment data, creating the appearance of reduced interest in Israeli tech and raising fears of a talent drain abroad.
Nevertheless, Mia Eisen-Tzafrir, CEO of LeumiTech, remains optimistic about current trends. "Our analysis shows encouraging signs with foreign investors, including newcomers to the Israeli market, actively participating in transactions despite recent challenges," she noted. "The second quarter data reflects growth in both deal numbers and transaction amounts compared to Q1 2024 and the same period last year. If this momentum continues, the tech sector is poised for a year of substantial growth."
* Israel21C contributed to this article.
