Less investment in Israeli high-tech coincides with judicial reform uncertainty
Investments in the Israeli high-tech sector reached merely $1.7 billion in the first quarter of 2023, the lowest volume since 2018, according to new statistics from the Start-Up Nation Policy Institute.
In comparison, Israeli start-ups raised $6.7 billion in the first quarter of 2022 and over $6 billion during the same period in 2021.
SNPI is a think tank which focuses on strengthening the Israeli tech sector and expanding its ties within the global economy.
The overall amount invested is particularly low given that three Israeli companies – eToro, Wix and Via – raised more than 40% of the total investments during this period.
The overall drop in investments is mostly expected to influence start-ups established after 2021. However, SNPI CEO Uri Gabai said, “the results are particularly worrying and are a wake-up call for anyone who cares about Israeli high-tech.”
Gabai said he believes many investors are reluctant to invest in Israel currently due to market uncertainty caused by the judicial overhaul controversy.
“We welcome the postponement of reform, but as long as uncertainty about the future of democratic institutions in Israel persists, the industry will continue to be challenged. It is important to warn: If the trend does not change not soon, it may be the end of the Start-up Nation,” warned Gabai.
The tech sector is the engine of the Israeli economy and represents more than 50% of all Israeli exports.
Israel’s commercial capital, Tel Aviv, has become the world’s fifth-largest producer of unicorn companies – companies valued at $1 billion or more – in the world.
The All Israel News Staff is a team of journalists in Israel.