Israeli startups raised about US$9.3 billion in the first half of 2025, according to Startup Nation Central, marking a 54% rise from the second half of 2024.

This is the strongest period for Israel’s tech sector since 2022, despite ongoing conflict and economic uncertainty.

The sector’s recovery comes as international investors continue to fund Israeli companies, particularly in cybersecurity and digital infrastructure.

A notable recent deal was the US$25 billion acquisition of cybersecurity firm CyberArk by Palo Alto Networks, the second-largest in Israeli tech history.

Israel’s tech industry maintains a diverse global customer base, reducing reliance on the domestic market.

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🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Israel’s funding landscape shifts toward fewer but much larger investment rounds

The $9.3 billion raised in H1 2025 reflects a fundamental change in how Israeli startups secure capital, with investors making bigger bets on fewer companies.

Data shows that while the number of funding rounds declined by 10%, the total capital raised increased by 58%, with the median deal size reaching an all-time high of $9 million1.

This represents a shift from the traditional Israeli startup model of many small rounds across numerous companies.

Mega-rounds over $100 million accounted for nearly half of all capital raised, indicating that investors are increasingly focusing on mature companies with proven business models rather than spreading investments across early-stage ventures1.

The trend suggests that the “spray and pray” investment approach has given way to more selective, concentrated bets on companies that have already demonstrated market traction and scalability.

2️⃣ Historical patterns show Israeli tech consistently thrives during periods of conflict

Israel’s current tech performance continues a decades-long pattern where the sector grows stronger during regional instability rather than contracting.

Since 1996, Israel’s economy has doubled in size despite continuous regional volatility, with the tech sector serving as the primary growth engine throughout multiple conflicts and security challenges2.

The country maintains the highest per capita venture capital investment globally at $630 per capita, a metric that has remained strong even during periods of heightened security tensions3.

This resilience stems from structural advantages: global demand for cybersecurity solutions intensifies during conflicts, Israeli companies’ expertise in remote work management becomes more valuable during disruptions, and the country’s diversified customer base across North America, Europe, and Asia provides geographic risk distribution.

The current 54% funding increase follows this established pattern, where external pressures often accelerate rather than slow Israel’s technological development and international business relationships.

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