Israeli start-ups attract nearly $3 billion in investments, a 50% increase from 2023

Read this article in:

Israeli start-up companies attracted a whopping $2.9 billion from investors during the period between April and June 2024, according to a new report released by LeumiTech and the IVC Research Center. This amount was 48% higher than during the corresponding period in 2023, before the war, when local start-ups raised $1.96 billion from investors.

“The number of investments by foreign investors (a foreign-owned entity whose head office is not in Israel) increased slightly in the last six months, following a slump in the fourth quarter of 2023,” according to the report.

Out of the 110 deals made during the second quarter of 2024, local Israeli cybersecurity companies secured six transactions above $100 million, which together constituted more than 60% of the totally accumulated investment capital. Wiz, an American-Israel cloud cybersecurity unicorn business, succeeded in raising $965 million, or about one third of the totally raised capital.

“If current volumes of transactions continue, we are on pace for the tech sector to end the year on a growth trajectory compared to last year,” LeumiTech CEO Maya Eisen-Zafrir assessed.

“From in-depth examinations we conducted regarding the identity of investors, it is encouraging to see foreign investors – who have never invested in Israel – taking part in transactions since the beginning of the war.”

IVC CEO Ben Klein also welcomed the report and said the investments in Israeli startups were “not trivial given the circumstances.”

“The growing presence of foreign investors shows the attractiveness of Israeli hi-tech,” Klein stated.

Because investors tend to avoid risk during periods of war and political unrest, investments in the Israeli tech industry fell by a whopping 56% to $6.9 billion in 2023. This was predominantly due to political unrest caused by the government's controversial judicial reform proposal. In addition, the Israeli tech industry suffered losses when it came to a temporary standstill after the Hamas terror attack on Oct. 7, and the subsequent war, as thousands of tech executive were mobilized to join the war.

In February, some 60% of multinational companies expressed confidence in the Israeli tech industry, according to a report compiled by the account business Ernst & Young.

While Iranian cyber attacks against Israel have reportedly deterred some investment, they have simultaneously stimulated investments in some Israeli companies. In April, Amir Rapaport, the founder of the Cybertech, assessed that Israeli cyber companies would continue to attract investment capital to address emerging threats.”