Editors: Yariv Lotan, VP of Product and Data; Einat Ben Ari, Senior Director Data and Insights, Tal Sibony Senior Manager Analytics and BI, Startup Nation Central
Data analysis and insights: Royi Nahum, Business Analyst, Brad Hofman, Data Analyst; Deema Wattad, BI Developer; Yanina Wainscheinker, Data Specialist, Startup Nation Central.
Including commentary by:

CEO, Startup Nation Central
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VP of Product and Data, Startup Nation Central
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Morbi at viverra mauris. In venenatis eleifend ullamcorper. Nullam ac pulvinar odio. Phasellus sagittis blandit orci, sed efficitur diam maximus eget. Quisque iaculis eleifend nunc ut faucibus. Donec ultrices erat in lacus congue condimentum. Duis vitae nunc a eros mattis malesuada. Nullam tempus sapien a rhoncus vehicula. Donec vehicula ac lacus eu mollis. Nunc vitae luctus neque, et auctor lorem. Vestibulum luctus at mauris nec mollis. Aenean sed auctor eros. Integer mattis auctor nibh ac lacinia. Ut imperdiet vehicula lorem, at consequat tellus placerat quis. Quisque condimentum urna eu est tempus rhoncus. Pellentesque auctor, mauris quis ullamcorper suscipit, metus arcu suscipit tortor, vitae convallis orci nunc vel ex. Sed sollicitudin ex in semper consequat. Nunc pharetra, eros vel condimentum venenatis, ipsum sapien luctus nibh, quis imperdiet sapien lorem vitae eros. Proin quis egestas dolor. Nunc rutrum facilisis nulla in lobortis.
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In 2025, Israel’s high-tech private funding landscape saw an increase in funding with a decrease in the overall number of funding events, and the average size of individual deals increased. The estimated number of private funding rounds, compared to 2024, declined 27% from 905 to 660, while estimated total capital raised grew by 3% to $13.4B.
Public funding events rose 14% with a nearly sixfold increase in value from $1.3B to $7.2B ,o the 10 events 3 were meaningful.
During this year, Israel recorded the highest merger and acquisition (M&A) activity in its history, with 129 transactions compared to 107, and the disclosed deal value rose nearly 5 times to $72.4B from $15.5B. M&A exit activity saw a 23.9% boost in the number of events and a threefold increase in value from $12.4B to $42B.

Co-Founder and Chief Product Officer, DecartAI
At DecartAI, we are an AI research lab at our core, with the goal of building an AI giant in Israel. We focus on building large-scale, proprietary models end to end, from optimization and architecture to inference, rather than layering AI features on top of existing products. Founded in 2023, we have scaled to more than 80 employees within a short period, driven by rapid progress in real-time generative video and perception models. We build the models ourselves, end to end, and expose them externally, that full ownership is what allows us to push real-time generative AI forward, and enable new, live, real-world-relevant use cases.
Operating at the frontier of AI comes with significant financial and organizational implications. Our fundraising journey has been shaped by the capital-intensive nature of training and serving advanced models, where infrastructure, compute, and elite research talent drive high ongoing costs. Early backing from leading global investors reflected conviction in our technological depth and long-term positioning, rather than short-term commercial metrics. In frontier AI, capital is not the hardest part, talent is. The real challenge is finding the people who can actually move the technology forward, and scaling our team has been more constraining than access to funding.
Beyond Decart itself, I see a broader ecosystem challenge. Competition is a critical mechanism for expanding the AI talent pool: a dense concentration of ambitious AI labs pushes researchers to grow faster and raises the overall level of expertise. In my view, this competitive dynamic is still underdeveloped in Israel compared to global AI hubs, limiting the speed at which top-tier talent emerges locally. Technically, our differentiation lies in full-stack control and continuous optimization across cost, quality, latency, and scale, enabling real-time inference for generative video use cases that remain rare globally. Looking ahead, I believe these capabilities will extend beyond digital experiences into the physical world, particularly robotics, where real-time perception and generation will form a foundational intelligence layer. Israel’s strength in engineering and optimization provides a strong base, but sustaining leadership in AI-first companies will require deeper talent pipelines, stronger competition, and significant infrastructure investment, alongside continued integration with global AI ecosystems.
In 2025, Israel’s private tech sector raised an estimated $13.7B across 658 funding rounds, with a median round size of $9.8M. Compared to 2024, deal values increased while activity contracted, with total capital raised increasing 12% while the number of rounds were down 25%. The median values increased 63% to $9.8M from $6M in 2024. These shifts highlight a maturing of the ecosystem and are consistent with an ongoing adjustment in global and domestic investment patterns, where capital is concentrated in fewer but larger transactions.
Early-stage funding showed a mixed picture. The number of early-stage rounds decreased 26%, falling from 505 in 2024 to 372 in 2025. Total capital invested in these rounds also declined, dropping 14% from $3.6B to $3.1B. The largest driver of growth was the mid stage, led by B rounds. Capital invested in these rounds increased 89%, rising from $2.4B in 2024 to $4.6B in 2025. This highlights a maturing from a ‘startup’ to a ‘scaleup’ nation. Companies raising B rounds often show recurring revenue, stronger client retention, and greater operational efficiency, which makes it easier for investors to justify higher valuations, as these companies are less speculative.
For an objective comparison of Israel’s performance with other regions, only reported private funding metrics are considered, excluding any estimates and outliers.
From 2019 to 2025, funding and deal activity in Israel and the United States follow the same cycle, but the 2024 to 2025 phase stands out. Once U.S. mega rounds are removed, both markets show a similar, moderate recovery after the sharp corrections of 2022 and 2023, yet Israel still records higher percentage growth in both 2024 and 2025, meaning it moves in the same direction as the U.S. but with larger swings.
In 2025, U.S. tech companies raised $331.1B in private funding, a 55% increase from 2024, with 27 mega rounds above $1B accounting for 71% of total deal value, up from 31% in 2024, so most of the acceleration comes from a small set of very large deals. Israel’s private funding reached $13.5B in 2025, up 29% year over year while the number of rounds fell 22%, pointing to a selective market in which investors deploy larger checks into fewer Israeli companies.
Across regions, Asia, Europe, and Israel all move through the same global funding cycle, with growth in 2020 and 2021 and corrections from 2022. Asia’s funding declines for three years and ends 2025 about 10% below 2024, Europe sees four straight years of contraction including a 34% drop in 2025, while Israel shows the biggest swings, with strong historical gains in 2020 and 2021, deep declines in 2022 to 2023, and a clear return to growth in 2024 and 2025.
Private funding in 2025 was dominated by a concentrated wave of A and B rounds representing 39% of total capital deployed (Including Safe Superintelligences $2B B round), with the majority of capital flowing into business software, cybersecurity, fintech and industrial tech. Health Tech led with the largest number of events showing broad investor interest in early stage medical ventures. Safe Superintelligence raised a $2B B round, while other notable private fundingrounds included Cyera who raised a $540M E round, and Rapyd Financial Network raised $500M in an undisclosed round.
Here is a list of all companies that raised funds during 2025.
A mega round is defined as any single funding round of at least $100 million . Between 2019 and 2024, mega rounds became an increasingly important driver of capital while remaining a small share of overall activity, with their share of total funding rising from 30% in 2019 to 47% in 2024, even though they accounted for only 1.8% of deals in 2019 and stood at 2.5% in 2024.
In 2025, total funding reached $13B and was almost evenly split between mega and non‑mega rounds, with each contributing about $6.73B, or roughly half of total capital. Safe Superintelligence’s $2B round alone represents 15% of all funding. Only 4% of transactions generated half of the capital, while more than 96% of deals were non-mega rounds sharing the remaining half, highlighting how a small set of very large financings shapes headline numbers.
What makes 2025 distinctive is this combination of balance by value and concentration by volume: a wide base of non-mega rounds continues to power everyday ecosystem activity, while a thin layer of mega rounds exerts an outsized influence on total capital raised and signals strong investor confidence in Israeli scale‑ups.
Cybersecurity led 2025 funding with the highest median round size of $21 million, followed by Fintech & Insurtech at $13 million and Industrial Technologies at $11 million, while Business Software captured the largest total funding value of $4 billion (33%), ahead of Cybersecurity’s $3.9 billion (32%). Health Tech & Life Sciences generated the highest deal volume at 153 rounds, surpassing Cybersecurity’s 124 rounds and Industrial Technologies’ 61 rounds, with Business Software and Fintech & Insurtech showing more selective activity at lower volumes. Cybersecurity combined large median rounds with strong total funding, Health Tech & Life Sciences emphasized volume with smaller $4.4 million medians, and Business Software maximized capital through scale rather than deal count.
In 2025, the sector mix of Israeli private funding shifted toward Business Software, Cybersecurity, and Industrial Tech. Business Software’s share of total capital rose from 27% in 2024 to 34% in 2025, while Cybersecurity’s share eased slightly from 38% to 33%, leaving the two sectors together at around two thirds of all funding. Fintech increased from 8% to 10% of capital, Industrial Tech grew from 7% to 10%, and Health Tech declined from 15% to 7%, signaling a clear re-weighting away from health toward software, security, and deep tech.
By deal count, the picture is more balanced but points in the same direction. Between 2024 and 2025, Cybersecurity’s share of rounds rose from 17% to 20%, while Health Tech’s share fell from 30% to 25% and Business Software remained broadly stable at around 22% of activity. Fintech’s share of rounds remained the same at 8%, and Industrial Tech declined from 11% to 10%, underscoring that growth in Business Software and Cybersecurity is driven more by larger round sizes than by a surge in the number of deals.
In 2025, Israeli tech funding concentrated on larger rounds in Business Software, Cybersecurity, and Industrial Tech, while Health Tech and Fintech lost share, signaling investor focus on scalable software, security, and deep‑tech infrastructure.
Explore detailed maps of key players across sectors, offering a clear view of the major companies and innovations shaping each industry. Use them to understand the landscape and spot opportunities:
Across the tech industry, the shift from startup to scale-up has become a central focus for entrepreneurs, investors, and corporate leaders, reflecting a growing emphasis on sustained growth rather than early formation alone. To capture this progression within the Israeli ecosystem, a tier framework was developed that classifies companies using measurable indicators of scale, momentum, and maturity. This framework reveals a clear continuum of organizational evolution: Startup companies remain lean and early in their development, while Early Growth companies already demonstrate a meaningful rise in organizational depth and funding capacity. Late Growth companies mark the point at which scale becomes pronounced, characterized by larger teams and significantly expanded capital needs. Mature companies differ primarily in longevity rather than size, operating with established structures shaped over many years. Together, these tiers illustrate how Israeli companies advance from initial formation through successive growth stages toward long-term market presence, highlighting where meaningful scale-up activity is emerging and which sectors exhibit deeper structural maturity.
Across the ecosystem, the tier distribution remains heavily weighted toward the Startup tier, which accounts for 64% of companies. At the same time, a meaningful share of firms has entered the scale-up phase, defined here as the Early Growth, Late Growth, and Mature tiers, which together represent 26% of companies. Beyond the private lifecycle, 11% of companies have reached exit outcomes. Overall, this structure indicates that while early-stage activity continues to dominate, there is a clear and advancing pipeline of companies progressing toward sustained growth, organizational scale, and realized market outcomes.
Across the ecosystem, most companies remain concentrated in the Startup tier, yet clear and differentiated scale-up patterns emerge across sectors. Cyber Security stands out with the strongest transition signal, showing the highest share of Early Growth companies at 24%, alongside a meaningful Late Growth layer (7%), indicating active movement beyond early formation. Fintech & Insurtech also demonstrates steady progression, with 16% of companies in Early Growth and a balanced distribution across later stages. Industrial Tech and Aerospace & Defense exhibit the most advanced maturity profiles, with Mature companies accounting for 18% and 17% respectively, reflecting sectors characterized by longer development cycles and more established operating structures. In contrast, Energy Tech, Health Tech, and Business Software remain predominantly startup-heavy, with limited representation from Late Growth and Mature companies, despite having sizable ecosystems. Overall, these distributions highlight where scale-up momentum is most pronounced and which sectors have already developed deeper structural maturity within the Israeli tech landscape.
Over the past several years, the ecosystem experienced a clear structural shift toward scale. The share of Startup companies decreased by 9%, while the scale-up segment, defined as Early Growth, Late Growth, and Mature companies, expanded by 7%, driven primarily by gains in the Early Growth and Mature tiers. At the same time, exit outcomes, combining acquired and public companies, increased by 2%, reflecting a growing share of companies reaching liquidity or long-term market presence. Overall, these changes indicate a maturing ecosystem with a stronger pipeline of companies progressing beyond early formation toward sustained growth and realized outcomes.
Since the previous report, Startup Nation Central has refined its method for tracking the fundraising journey to improve statistical accuracy across company cohorts. The updated model uses more robust grouping of rounds and company profiles, applying sector, funding types, and grouping filters only where there is sufficient data to support reliable analysis.
Fundraising Journey
This analysis examines companies following clear, ordered fundraising paths starting at Foundation and progressing through pre-seed/seed, A, B, and C rounds, excluding exits and without skipping stages.
Investor Concentration Trends
From 2021 to 2025, investors directed capital toward fewer, higher-quality Israeli startups progressing from Foundation through C rounds. Total deal volume fell 18% from 574 rounds in 2024 to 473 rounds in 2025. Median amounts per stage increased across all stages.
Stage-Specific Shifts
Investors focused on startups with robust fundamentals, resulting in larger median check sizes at each stage and higher qualification standards. Time from Established to Pre-Seed/Seed lengthened from 12 months in 2022 to 15 months in 2023; median rounds grew 83% from $3M in 2024 to $6M in 2025. Pre-Seed/Seed to A time rose from 23 months in 2022 to 31 months in 2025, with median amounts up 23% from $13M to $16M.
Later-Stage Dynamics
Time from A to B increased from 17 months in 2022 to 27 months in 2025; median amounts climbed 27% from $30M in 2024 to $37.25M. B to C time dropped from 29 months in 2024 to 19 months in 2025, aligning with 20 months in 2022, while median amounts rose 47% from $30M to $44M.
Overall Pattern Since 2022
Raising times extended across stages, but median amounts rose substantially. In 2025, early-stage timelines grew slightly due to rigorous validation, while B to C rounds accelerated for leading performers.
Private Funding Stage Progression Analysis
This analysis tracks success rates for Israeli tech companies advancing through private funding stages from Foundation onward. It measures the share completing the next round or an exit within 12 or 24 months, revealing key shifts in ecosystem dynamics.
Foundation Stage Trends
Foundation companies maintain robust early fundraising speed. Quick progression rates peaked in 2021 at 49%, dipped in 2023 to 46%, then stabilized through 2024 and 2025. Longer-term success held steady until a notable drop in 2025, signaling consistent early momentum with emerging caution.
Post-Pre-Seed/Seed Trends
Progression after Pre-Seed or Seed rounds has weakened steadily over time. Success rates trended downward consistently from 27% in 2020 to 15% in 2024, with no rebound in 2025. This points to growing hurdles in early scaling as investor scrutiny intensifies.
A/B-Round Follow-On Trends
A-round and B rounds follow-ons show a clear decline from strong early levels. Rates stabilized at moderate levels of 20% to 21% through 2022 to 2024 before collapsing sharply in 2025. The break in prior stability underscores heightened late-stage investor caution.
C-Round Trends
Later-stage C rounds show recent volatility after maintaining moderate success levels. C-round companies specifically peaked strongly in 2019 at 49% before stabilizing through 2022 at 17% increasing to 23% in 2024. 2025 shows an increase to 14% from 10% in 2024.This pattern signals deepening investor caution, requiring proven traction before funding advanced scaling.
Key Takeaways for Founders
Early Foundation stages remain a fast track for initial wins, while later stages grow far tougher. Founders benefit from rapid post-Foundation execution to secure Pre-Seed or Seed rounds, then must prioritize proven scalability to navigate rising investor selectivity.
Foundation success rates from 2022 to 2025 across all sectors peaked. Cybersecurity reached 76% in 2023 and fell to 56% in 2025. Business Software success rates held at 45% from 2022 to 2024 and reached 35% within 12 months in 2025. Health Tech success rates rose to 52% in 2023 but dropped to 32% in 2025.
Stage Performance
Cybersecurity indicates the most success in 2024 with Pre-Seed/Seed at 33% and A Round at 46%. Business Software has the highest success in B Round of 50% followed by Automotive and Mobility which reached 33%.
Key Insights
Private funding shows compression, with Pre-Seed/Seed slightly ahead of growth stages despite higher risk. Cyber Security sustains traction , while most sectors drop below 20% in progression.
The Israeli IPO market shifted sharply after the 2021 peak, when both the number of listings and their offering size were at their highest. Starting in 2022, meaningful IPOs, defined here as offerings above $50 million, became increasingly rare. By 2024, the market reached its lowest point, with both the smallest number of listings and the smallest aggregate offering size. Most activity in this period consisted of small-scale listings on secondary exchanges in Canada (TSXV) and Australia (ASX), while Tel Aviv (TASE) also saw only modest offerings.
In 2025, the trend reversed. The number of IPOs increased only slightly, yet the overall offering size grew sharply, expanding by about 21 times compared with 2024. Large US-listed transactions on Nasdaq and the NYSE, including Navan at $920 million, eToro at $710 million, and Via at $490 million, restored meaningful scale to the market and reestablished the major United States exchanges as the primary venue for significant Israeli listings.
Israeli non-IPO public fundraising experienced pronounced volatility between 2019 and 2025, while transaction volumes remained relatively stable, indicating that market swings were driven primarily by shifts in capital concentration per transaction rather than by changes in transaction activity.
In 2025, the market recorded a clear rebound in public fundraising volumes. Convertible bonds surged to $5B, up from just $0.1B in 2024, representing a 50-fold increase, and accounted for approximately 71% of non-IPO public funding. This marks a renewed reliance on convertible instruments not seen since the early pandemic period, following several years of marginal activity between 2021 and 2024. PIPE transactions also expanded materially, growing by more than three times, while non initial public offerings increased at a more moderate pace, rising by roughly 2.4 times.
At the transaction level, momentum was led decisively by convertible bonds. The number of convertible bond transactions doubled between 2024 and 2025, the strongest expansion among all non-IPO public funding instruments, underscoring their renewed centrality within the public market. Non initial public offerings also expanded, with transaction activity increasing by 50%, while PIPE activity rose more moderately, growing by approximately 14%. Together, these patterns indicate that the 2025 reopening of the market was driven primarily by a sharp acceleration in convertible bond usage.
The graph below presents a performance comparison of two indices over the past year: the Finder Index, an equal-weighted index calculated by Startup Nation Central, based on Israeli companies traded in NASDAQ, and the NASDAQ 100 Equal Weighted index. The equal-weighted approach provides a balanced view, particularly important when comparing indices with companies of varying market sizes. To further improve alignment composition with the NASDAQ 100 EW, the Finder NASDAQ Index includes a $50 million market cap minimum threshold, which also reduces volatility.
In 2025, both indices deliver similar overall returns. The Finder NASDAQ Index rises by 15%, slightly outperforming the Nasdaq Equal Weight 100, which rises by 14%.
Despite this close annual outcome, month-level performance differences are more pronounced. In April, the Finder NASDAQ Index increased by 4%, compared to 0.7% for the Nasdaq Equal Weight 100. In June, the Finder index posts an 8% gain vs 5% for the benchmark, and in September, it rises 7% compared to 4%. Conversely, November stands out as the sharpest divergence on the downside, with the Finder index declining 8%, while the Nasdaq Equal Weight 100 falls by 2%.
These episodes illustrate that while cumulative performance is closely aligned, the Finder NASDAQ Index experiences wider month-to-month swings relative to the benchmark.
In 2025, the public Israeli tech landscape shows a clear sector-driven rebalancing shaped by the AI era and heightened global security needs. Cybersecurity and defense-oriented companies dominate market capitalization and revenue scale, reflecting sustained demand for digital and physical security capabilities. Semiconductor and hardware-adjacent sectors also gain prominence, driven by the growing necessity for chips, compute efficiency, and advanced manufacturing to support AI workloads. In contrast, software, fintech, and consumer-focused sectors continue to generate meaningful revenues but face more conservative valuation treatment, as markets increasingly prioritize infrastructure depth, earnings durability, and strategic relevance over pure growth narratives.
Here is a list of all publicly traded Israeli tech companies (on the various stock exchanges) updated daily.

CEO & Co-Founder, Lorem Ipsum Ltd.
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Donec ultrices erat in lacus congue condimentum. Duis vitae nunc a eros mattis malesuada. Nullam tempus sapien a rhoncus vehicula. Donec vehicula ac lacus eu mollis. Nunc vitae luctus neque, et auctor lorem. Vestibulum luctus at mauris nec mollis. Aenean sed auctor eros.
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In 2025, total M&A value reached $73B, heavily skewed by two exceptional transactions, the acquisition of Wiz by Google for $32B and CyberArk by Palo Alto Networks for $25B. Excluding these deals, the underlying M&A value totaled $16B, continuing the strong recovery that began in 2024, when activity rebounded sharply toward 2021 peak levels, and extending it further in 2025 to a new high. Within this adjusted total, four large transactions, Next Insurance ($2.6B), Melio ($2.5B), Sapiens International Corporation ($2.5B), and Verint Systems ($2B), accounted for roughly 60% of M&A value.
Overall, after a strong normalization year in 2024, 2025 reinforced the upward momentum, combining record headline value with sustained deal flow and continued concentration among a small number of large acquisitions.
After a subdued 2023, the value of M&A exits rose sharply in 2024, increasing by 253% compared to 2023. In 2025, the exit value decreased by approximately 13% year over year.
Despite this decline in value, the number of first-time exits grew substantially: an increase of about 32% from 2024 to 2025.
This combination lowers the total value, but significantly more deals indicate a market shift toward more frequent but smaller exits. Acquirers appear to be prioritizing capability-driven or strategic add-on acquisitions, while being more conservative on pricing. This dynamic reflects a market where activity is robust, but valuations for exits remain under pressure.
First-time M&A represents approximately 86% of total M&A activity on average across the period, indicating that the Israeli tech acquisition market is predominantly driven by companies engaging in M&A for the exits rather than acquire on multiple occasions.
M&A median values follow a clear year-on-year pattern shaped by deal size mix. From 2019 to 2021, the median increased steadily as medium-sized deals ($100M–$1B) expanded sharply, lifting the midpoint. In 2022, this momentum eased as the share of mid-sized deals declined and smaller transactions gained weight. The trend resumed in 2023 and peaked in 2024, when renewed concentration in mid-sized deals temporarily pushed the median to $200M.
In 2025, the distribution reset. The share of mid-sized deals declined significantly, while small deals increased and large deals grew from a low base. Despite higher overall deal volume, this broader shift toward smaller transactions pulled the median back to $100M, reflecting normalization in deal mix rather than weaker buyer demand.
M&A median values across all transactions follow a clear year-on-year pattern shaped by changes in the overall transaction mix. From 2019 to 2021, the median increased steadily, indicating a shift in where activity was concentrated across the market. In 2022, this momentum eased, resulting in a lower median level. The trend resumed in 2023 and peaked in 2024, when the median reached $200M. In 2025, the distribution reset. Despite higher overall deal volume, the median declined to $100M, reflecting normalization in market dynamics rather than a weakening in M&A activity.
The average time for Israeli companies to reach their M&A exit has accelerated significantly since 2022. After peaking at 11 years in 2022, the timeline began to shorten with a 21% decline in 2023, continuing through 2024 and reaching an average of 8.1 years in 2025.
The notable increase in total deal volume in 2025, could be driven by companies achieving exits at a faster pace. The 27.4% reduction in average exit time between 2022 and 2025 reflects two key drivers: improved efficiency across the acquisition process and greater readiness among buyers to acquire companies earlier in their development.
The average time for Israeli companies to reach an M&A exit has accelerated markedly since 2022. After peaking at 11 years in 2022, the timeline declined by 21% in 2023, continued to shorten through 2024, and reached an average of 8.1 years in 2025.
This 27.4% reduction in average exit time between 2022 and 2025 coincided with a higher volume of completed transactions in 2025, reflecting a clear shift toward faster M&A exits across the Israeli tech ecosystem.
The median time to exit for Israeli tech acquisitions remained relatively stable over the period, with only moderate fluctuations. From 2019 through 2020, the median stood at six years, rising to seven years in 2021 and peaking at eight years in 2022. This increase was followed by a gradual reversal, with the median declining to seven years in 2023 and returning to six years in both 2024 and 2025. Despite variations in annual acquisition volume, the data indicates a reversion to shorter exit timelines in recent years, suggesting greater consistency in the pace at which companies reach acquisition outcomes.
The relationship between total private funding and M&A exits highlights a clear shift in value creation dynamics over time. In 2025, the typical Israeli tech company has raised a cumulative $20M in private funding and exits at $100M, translating into a median return on investment of 4.9 times, broadly in line with pre-2022 levels. This follows a sharp compression in 2022, when cumulative funding peaks at $28M while exit value declines to $80M, reducing returns to 3.1 times and reflecting a valuation mismatch. Since then, the ecosystem stabilizes, with 2024 standing out as a step-change year, marked by a significant rise in cumulative funding to $50M alongside a corresponding increase in exit value to $230M. Overall, the trend indicates a transition toward larger, more mature companies, where higher cumulative capital deployment increasingly supports higher-value exits rather than eroding returns.
Between 2019 and 2025, Israel’s exit activity was shaped primarily by international buyers, who consistently drove both the number of transactions and most of the total deal value. Foreign acquirers maintained a dominant role across the period, accounting for the overwhelming majority of capital deployed and a clear majority of annual events. Local acquirers increased their participation in 2022, but this momentum did not continue, and by 2025, their share of total deal value fell to 2 percent while their share of events rose modestly. This gap between activity and value shows that domestic buyers were more active in completing smaller transactions, while large-scale acquisitions remained firmly led by global strategic players. Together, the combined trends in events and deal value point to an ecosystem where international capital continues to set the pace and scale of exits in Israel.
Several key sectors in Israel’s technology landscape show a clear pattern in the behavior of companies that acquire other companies, reflecting a structured approach to growth through M&A. In Cybersecurity, acquiring companies are the most active, with nearly 10% of all active firms in the sector engaging in M&A. These acquirers typically complete close to three transactions each, with average deal values of approximately 170 $M. In Fintech and Insurtech, acquiring companies account for about 7% of the sector and tend to execute roughly 3 transactions each, with average deal sizes of 67 $M. In Media and Entertainment, acquiring companies represent a little more than 6% of the sector and are often associated with some of the largest transactions in the market, averaging around 190 $M per deal. Together, these acquiring companies form a concentrated group that relies on M&A at a meaningful scale, highlighting how strategic buyers use acquisitions to expand and strengthen their competitive position.
Several key sectors in Israel’s technology landscape show a clear and differentiated pattern in the behavior of acquiring companies, reflecting a structured approach to growth through M&A. Cybersecurity stands out with the highest concentration of acquirers, where nearly 10% of active companies engage in acquisitions, typically completing close to three transactions each at an average deal size of about $170M. Media & Entertainment follows with fewer acquirers but some of the largest transactions in the market, averaging roughly $190M per deal.
Aerospace & Defense merits special attention: while only about 7% of active companies in the sector act as acquirers, those that do pursue M&A at a materially higher scale than most sectors, with average deal values exceeding $110M and a median close to $50M. This profile points to fewer but more deliberate, capital-intensive acquisitions, consistent with long development cycles, strategic asset consolidation, and defense-driven technology integration. Together, these patterns highlight how a relatively small group of strategic buyers leverages M&A differently across sectors—ranging from frequent capability-driven deals in Cybersecurity to high-impact, strategic consolidation in Aerospace & Defense.
In 2025, Israel’s technology M&A landscape was defined by several high-value transactions led by global strategic and financial buyers. Key deals included Google’s $32B acquisition of Wiz and Palo Alto Networks’ $25B purchase of CyberArk, both underscoring continued global interest in Israeli cybersecurity leadership.
Other notable transactions included Munich Re’s $2.6B acquisition of Next Insurance, Xero’s $2.5B purchase of Melio, Advent International’s $2.5B acquisition of Sapiens, and Thoma Bravo’s $2B deal for Verint Systems. Collectively, these acquisitions highlight the sustained appeal of Israeli technology assets and the central role of international buyers in shaping significant exit activity during 2025.
These deals alone represented the vast majority of total M&A value in 2025, highlighting strong value concentration at the top end of the market.
Here is a list of all Israeli tech companies that were acquired in 2025
The 2025 acquisition landscape reflects a clear variety of buyer types and strategies. Israeli strategic acquirers, led by Check Point Software Technologies and Wix, continued a pattern of steady, repeat acquisitions, primarily at small to mid-size deal levels.
Global strategic buyers dominated overall deal value, driven by large transactions by Google and Palo Alto Networks, alongside consistent activity from enterprise platforms such as Salesforce, Apple, Amazon, Qualcomm, and Dell Technologies.
A distinct defense and industrial-focused consolidation strategy emerged with Ondas Holdings, which led 2025 by transaction count rather than deal size. Among financial buyers, Apax Partners stood out as a globally active fund executing large-scale investments, while Thoma Bravo reinforced its role as a large-deal acquirer, concentrating capital into fewer, high-value transactions.

Co-Founder and Managing General Partner, Peregrine VC
At Peregrine, our long-standing focus on healthtech stems from deep operational experience, with broader impact emerging naturally over time. Having built and backed medical startups myself, I strongly believe in partnering with founders from the earliest stages and supporting them through long, capital-intensive development cycles. We like to work with entrepreneurs from the very beginning, from the moment there is just an idea, and accompany them all the way. This approach has remained consistent since the fund’s inception, even as our sector mix has evolved.
Over the past decade, we have expanded beyond traditional implantable medical devices toward oncology, therapeutics, and digital health, while remaining cautious in areas where business models and reimbursement paths are unclear. Over the past two to three years, funding constraints have become the dominant challenge for Israeli medical startups, driven by global market corrections, weak post-IPO performance of the 2020–21 cohorts, domestic political uncertainty, and the impact of war. The biggest pain point today is financing, there has been a real slowdown in medical investments, globally and especially in Israel. At the same time, extended development timelines and regulatory requirements continue to demand capital discipline and patience in an industry with no shortcuts.
When it comes to AI, I view adoption as inevitable but uneven across subsectors. While AI is already transforming drug discovery and digital health through faster modeling and experimentation, its penetration into core medical devices remains more gradual. In pharma, AI already provides enormous advantages, modeling molecules, testing thousands of variations, and that acceleration is very real. I expect device innovation to increasingly benefit as computational tools deepen their role in physiology and design.
Addressing diversity in the ecosystem, I acknowledge a modest increase in the number of female entrepreneurs in healthtech, but progress is still far from sufficient. Meaningful change must start much earlier in the pipeline, long before company formation. As part of this effort, we regularly bring groups of high-school female students into our offices, exposing them firsthand to startups, investors, and the technology innovation environment. Early exposure, in my view, is critical to expanding the future pool of founders and leaders in the tech ecosystem.
Despite the near-term challenges, I remain optimistic about Israel’s entrepreneurial pipeline, pointing to a post-war rebound in company formation and Israel’s enduring global edge in execution efficiency. Strategic acquirers are often amazed that Israeli companies reach clinical results with half the capital it would take in the U.S. Sustaining this advantage will require disciplined capital allocation, long-term thinking, and continued investment in talent development.
Investor Concentration and Reliance on Foreign Capital
Investor participation in Israel’s high-tech sector peaked in 2021 at 562 Israeli and 1,011 global investors, with 30% and 34% annual growth rates respectively. Declines began in 2022 due to global recessionary pressures, followed by sharp drops of 44% in Israel and 42% globally in 2023 caused mainly by rising interest rates and reduced liquidity. Participation fell further by 17% in Israel and 23% globally from 2024 to 2025 due to regional conflicts and geopolitical tensions.
Fewer investors are now deploying larger capital per deal, targeting later-stage rounds and strategic acquisitions. Remaining investors show strong conviction and capacity to support substantial deals, including major exits and public listings.
This evolution continues to support a shift from “startup nation” to “scaleup nation,” with focus on resilient sectors offering stable returns despite volatility. The record-high funding sizes in 2025 reaffirms confidence in the search for quality over quantity.
From 2023 to 2025, global investor participation in Israel’s high-tech sector decreased both in the number of rounds and in growth rates. Rounds with global investors declined 17% from 502 in 2024 to 419 in 2025. Over the full 2023 to 2025 period, there was a cumulative decline of 26% in global investor rounds, signalling a prolonged reduction in international activity.
Israeli investor participation moved in the opposite direction in 2024 before contracting in 2025. Rounds with Israeli investors rose 51% in 2024 and then fell 44% in 2025, pointing to a broad‑based slowdown affecting both foreign and local investors by 2025.
The data reinforces the “flight to quality”, where Israeli investors demonstrated an ability in 2024 to step in and support local companies when international capital became more selective. This pattern is consistent with a maturing ecosystem that relies less on volume and more on scale‑ready companies, stronger fundamentals, and higher conviction investors, positioning Israeli high tech for more sustainable, long‑term growth once macroeconomic and geopolitical conditions improve.
Between 2023 and 2025, Venture Capital (VC) raising in Israel’s tech ecosystem remained broadly stable at approximately $2.6B in 2023 and $2.5B in 2024, then increased sharply to $5.9B in 2025, with the largest single contribution coming from Viola Credit’s $2.35B raise. This trajectory indicates that, despite a cautious funding environment, the ecosystem is attracting larger funds and building deeper pools of structured capital to support scaling companies through volatile regional and market cycles..
The Israeli investor ecosystem in 2025 is characterized by a core of repeat backers alongside a group of funds focused on first-time investments. A small cluster of leading venture funds accounts for a disproportionately high share of total rounds, reflecting their role as anchor investors that support portfolio companies across multiple stages. Leading these portfolio companies is iAngels with 24 rounds and 6 first time rounds, followed by TLV Partners with 19 rounds and 11 first time rounds.
Mid tier investors add depth to the ecosystem, typically participating in a moderate number of rounds while maintaining a balanced mix between follow on and first time investments. This cluster is led by Cerca Partners with 8 total rounds, 5 of which are first time, followed by Hanaco Ventures, The Israeli Innovation Authority, StageOne Ventures and Tal Ventures , each with 8 rounds. In parallel, a distinct group of accelerators, seed funds, and public or strategic investors directs most or all of its capital into first time rounds, lifting new company financings to nearly half of recorded activity.
This structure supports a maturing ecosystem in which total rounds are increasingly concentrated in experienced, high conviction platforms, while first time rounds are spread across a broader base of early stage investors that focus on sourcing, building, and de-risking the next generation of Israeli tech companies.
Insight Partners, Bessemer Venture Partners, and Lightspeed Venture Partners emerge as the most active global investors in Israeli tech in 2025, with 11, 7, and 6 total rounds respectively, and a strong tilt toward first time participation in the case of Insight Partners and Accel. Together with Maor Investments and NFX Capital, these companies have repeated exposure to Israeli companies. These investors form a group that invests in more than 3 rounds and represents roughly 25% of all global investor rounds, while global investors participating in fewer than 3 rounds account for about 49% of activity. More than 100 additional international investors, corporate venture arms, and multinationals contribute only one or two rounds each, underscoring that Israel’s global capital base is highly diversified yet anchored by a relatively small set of frequent, high conviction partners focused on enterprise software, cybersecurity, fintech, and infrastructure.
Here is a list of all investors in 2025
The analysis of GDP, Exports, and Local Employment was conducted in collaboration with the Aaron Institute for Economic Policy at Reichman University, using data from the Israeli Central Bureau of Statistics (CBS). Special thanks to Dr. Sergei Sumkin, Senior Researcher at the Aaron Institute for Economic Policy, for his valuable contribution.
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The analysis of business risk, financial stability, and sectoral resilience was conducted by Dun & Bradstreet Israel, based on proprietary credit risk models and company-level data covering the Israeli business ecosystem. Special thanks to the Dun & Bradstreet Israel research and analytics team for their contribution and insights.
Dun & Bradstreet Israel assigns every company and business entity in Israel a financial risk score ranging from 0 to 100, reflecting the probability of financial failure over the following 12 months. Lower scores indicate higher risk. This forward-looking credit risk model spans all business entities across the economy and serves as a consistent benchmark for assessing financial resilience and stability.
Viewed through this lens, Israel’s high-tech sector has consistently demonstrated stronger financial fundamentals than the broader economy. Since 2020, the average D&B score for the overall economy has remained relatively stable at around ~32, while the high-tech sector has maintained a materially higher average score of approximately ~38. This persistent gap highlights the structurally stronger risk profile of technology-driven companies, even during prolonged periods of macroeconomic and geopolitical uncertainty.
According to D&B Israel’s analysis, a clear shift in trend emerged starting in the second quarter of 2024. The strengthening in credit risk scores reflected a reduction in uncertainty, which enabled a gradual return to more stable economic activity and forward-looking business planning.
This positive momentum intensified during the second half of 2024 and into the first half of 2025. D&B attributes part of this improvement to the evolving security environment, including developments during the Iran-Israel war, which contributed to improved market confidence regarding the economy’s ability to cope with external threats. These developments helped reduce risk premiums across key sectors, supporting a gradual improvement in financial indicators across the economy. While both the high-tech sector and the broader economy benefited from this trend, high-tech continued to outperform in terms of overall financial stability.
A closer look at high-tech sub-sectors reveals differentiated levels of resilience. Cybersecurity continues to lead, with average D&B scores reaching approximately 42 in 2025, reflecting its strong business robustness and sustained global demand. Defense tech related segments also demonstrate steady improvement, with scores rising to around 39.
Following earlier declines, fintech and gaming show signs of gradual recovery. Fintech scores increased to roughly 37, while gaming stabilized a bit lower, indicating improving but still more moderate resilience compared to leading sub-sectors. By comparison, the overall economy remained at a lower stability level, with average scores around 32, underscoring the continued gap between technology-driven industries and the broader business environment.
Together, these patterns suggest that while macroeconomic and security-related shocks affect the entire economy, high-tech, particularly its leading sub-sectors, retains a stronger capacity to absorb risk and recover over time.
This section maps how Israeli tech companies are distributed across AI usage categories along the AI stack, from application-level implementations to platforms, models, and infrastructure. The analysis highlights where company concentration is highest and positions AI as a horizontal technological layer rather than a standalone sector. A global benchmark is integrated to contextualize Israel’s distribution relative to broader international patterns.
Building on the AI stack classification, this section examines how AI has been adopted across key Israeli technology sectors. The focus is on the depth of integration rather than simple presence, distinguishing between sectors where AI has become a core component of products and operations and those where adoption remains more incremental.
This section maps how Israeli tech companies are distributed across AI usage categories along the AI stack, from application-level implementations to platforms, models, and infrastructure. The analysis highlights where company concentration is highest and positions AI as a horizontal technological layer rather than a standalone sector. A global benchmark is integrated to contextualize Israel’s distribution relative to broader international patterns.
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Signed in 2020, the Abraham Accords established formal diplomatic and economic relations between Israel, the United Arab Emirates, and Bahrain, later joined by Morocco and Sudan. The agreements opened pathways for trade, investment, and innovation partnerships across the Middle East, transforming regional economic dynamics. In the current post‑war environment, renewed dialogue around an expanded “Abraham Accords 2.0” presents an opportunity to deepen collaboration with Gulf Cooperation Council (GCC) economies such as Saudi Arabia, Kuwait, and Oman.
This next phase could enable Israeli and Gulf partners to jointly advance high‑tech industrial programs, cross‑border investment platforms, and infrastructure modernization initiatives. Potential areas of synergy include energy transition technologies, water desalination, food security innovation, digital finance, and advanced manufacturing. Together, these partnerships position the region for stronger economic resilience, higher technology integration, and enhanced participation in global value chains.
Between 2020 and 2025, GCC private funding into Israeli high tech combined volatile capital volumes with a relatively steady, and recently stronger, flow of deals. Funding fell to $35M across 4 events in 2024, then rebounded to $186M across 8 events in 2025, marking the highest deal count in the period.
This pattern shows that, while yearly funding amounts fluctuated, the number of transactions stayed stable between 2020 and 2024 and expanded in 2025, pointing to broader engagement rather than reliance on a few large deals.
GCC private funding still represents a limited share of total capital in Israeli high tech, so this remains an early, exploratory channel. The rise in transactions to 8 events in 2025 signals growing ties between GCC investors and Israeli companies and indicates room for further growth as political, regulatory, and commercial links deepen.
GCC investment in Israeli high tech is spread across funding stages, with a clear tilt toward early rounds and a meaningful share of deals where the stage is not disclosed. Seed and A rounds account for most identified transactions, with only a small number of later-stage rounds, alongside a notable cluster of undisclosed-stage deals.
By sector, GCC investors focus on a broad mix of technology domains. Agriculture and Food Technologies, Cybersecurity, Aerospace, Defense and HLS, and Industrial Technologies together account for most investments, while Business Software, Health Tech and Life Sciences, Fintech and Insurtech, Automotive and Mobility Technologies, and Energy Tech each record a smaller number of deals. This points to diversified, but still relatively shallow, exposure across multiple strategic areas.
The UAE is the primary destination for Israeli tech in the GCC, with the highest number of targeting instances, underscoring its role as the main commercial gateway for regional expansion. The country offers a business friendly environment, including free zones that simplify setup and operations for foreign companies, and its diversification into tech, healthcare, and sustainability generates strong demand for Israeli infrastructure and adjacent technologies.
Dubai and Abu Dhabi also benefit from trade agreements and investment incentives that position them as hubs for pilots and scaling, while Morocco, Oman, Saudi Arabia, and Bahrain form a secondary but growing group of destination markets.
Across sectors, health tech and life sciences, industrial technologies, and agriculture and food technologies record the highest levels of targeting, reflecting strong demand for applied solutions that support productivity, sustainability, and service delivery. Business software and energy tech also show meaningful activity, with cybersecurity, automotive and mobility technologies, and fintech and insurtech forming a second tier of focus areas. This distribution indicates that Israeli companies see GCC and wider Arab markets as most attractive for scalable, infrastructure adjacent and sector specific solutions, with the UAE as the central hub for regional go to market.
Between 2020 and 2025, investor activity linked to Abraham Accords countries demonstrates that the United Arab Emirates has become the principal financial conduit between Israeli tech and the wider region. From 2020 to 2025, the UAE is associated with 209 investor participations out of 244 and $924M out of $928M in disclosed capital, reflecting both consistent engagement and substantial ticket sizes over these six years.
In the years 2022 to 2024, Morocco records 33 participations and $5M, emerging as a meaningful but much smaller secondary partner and indicating early ecosystem ties that are still developing in scale. Bahrain appears only in 2024, with 2 participations and no disclosed capital, which points to mainly exploratory activity in that specific year.
The 2020 to 2025 investor distribution underscores the importance of an Abraham Accords strategy that is anchored in the UAE over this timeframe, while cultivating Morocco as a complementary growth channel and treating Bahrain as a relationship‑building market rather than a current capital hub.
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Startup Nation Central is a free-acting NGO providing global solution seekers frictionless access to Israel’s bold and impatient innovators to help tackle the world’s most pressing challenges. Our free business engagement platform, Finder, grants unrestricted access to real-time, updated information and deep business insights into the Israeli tech ecosystem.