Israeli startups raise over $12 billion in 2024 despite war

Israeli startup companies succeeded in raising a whopping $12.2 billion in 2024, according to Start-Up Nation Central (SNC). This constituted a 31% increase in raised capital compared to 2023.

The report also revealed that 2024 marked a return to large-scale investments compared to more modest investments during the preceding year. Approximately 15 large business deals in 2024 generated around $4 billion in the Israeli tech sector. 

The result is impressive as Israeli startups succeeded in accumulating larger amounts during a difficult wartime than startups in most countries raise during a more favorable peace time. Israeli cybersecurity startups, which constitute 7% of all local high-tech businesses, succeeded in accumulating $3.8 billion or approximately one third of the total capital. 

Start-Up Nation Central is an organization that focuses on strengthening the Israeli tech sector. While the Israeli tech industry only employs around 10% of the total Israeli workforce, it constitutes a critical engine in the local economy and generates over half of Israel’s total annual export earnings. 

Startup Nation Central CEO Avi Hasson praised the resilience and adaptability of the Israeli tech sector in such challenging times. 

“In 2024, Israel’s tech ecosystem showcased resilience and adaptability despite domestic uncertainties and geopolitical tensions. Global dynamics, particularly U.S. investment trends, helped Israel maintain its status as a global innovation hub and leader in sectors like cybersecurity. The ecosystem has matured into a scaleup powerhouse, supported by multinational corporations deeply involved in its success,” Hasson assessed. 

However, he stressed that the Israeli government needed to step in and do more to support the local tech industry. 

“But maintaining this edge demands proactive policies, strategic investments, and a focus on new growth engines.” 

Hasson expressed optimism about the Israeli tech sector already in March 2024. 

"I am less worried today than I was during the judicial overhaul period," he said referring to the Netanyahu government’s controversial judicial reform, "because in the end, more than anything else, our most important asset is the human capital. Israel is a hub of human, entrepreneurial infrastructure, with a unique environment, making it suitable for building startups.”

Yariv Lotan, VP of Digital Products and Data at Startup Nation Central, assessed that the Start-Up nation Israel was transformed in 2024 from a small-sized startup model to a scaleup powerhouse. 

"This shift is defined by larger funding rounds, a growing number of mature companies, and increased acquisition-driven exits,” Lotan stated. 

Looking ahead, Start-Up Nation Central assesses that the Israeli tech industry will be impacted by larger U.S. and global trends and developments. The organization predicts that the cybersecurity segment will continue thriving amid volatile geopolitical global trends. 

Cybersecurity experts assessed in April 2024 that Israeli cybersecurity businesses were strengthened as a result of persistent Iranian malicious cyberattacks. 

“The trend of increased mergers and acquisitions in Israeli cyber, which began last year, continues into 2024, as global cyber threats grow year by year,” assessed Amir Rapaport, the founder of the company Cybertech. “In contrast to other sectors, geopolitical tensions increase interest and investment in cyber companies," he added.