Q3 2025 Report

Israeli Tech Ecosystem

29 August,2025
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Including commentary by:

Prompt Security
Pitango

Editors: Yariv Lotan, VP of Product and Data; Einat Ben Ari, Senior Director Data and Insights, Startup Nation Central.

Data analysis and insights: Brad Hofman, Data Analyst; Deema Wattad, BI Developer; Yanina Wainscheinker, Data Specialist, Startup Nation Central.

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Content

Introduction
Executive Summary
Ecosystem Landscape
Private Companies
Private Funding Trends
Sector Analysis
Fundraising Journey
Public Companies
Public Company Trends
Finder NASDAQ Index
Notable Public Companies
Mergers & Acquisitions
M&A Trends
Notable M&As
Investors
Investor Trends
Notable Investors
Economic Indicators
Contribution to GDP and Exports
Local Employment Trends
Employment by Israeli Tech Companies
Summary
Methodology Notes
About Us

Introduction

Executive Summary

Yariv Lotan
Yariv Lotan
VP of Product and Data, Startup Nation Central

Executive Summary: Ecosystem Maturation Accelerates

The Q3 2025 report tells a story of an Israeli tech ecosystem in a clear phase of accelerated maturation. The long-term, gradual shift from “Startup Nation” to “Scale-Up Nation” that began over the last decade is solidifying as the market navigates global headwinds with a decisive “flight to quality”.

 

While a 38% quarterly drop in private funding could indicate significant challenges, the underlying data reveals a more complex story. The ecosystem isn’t shrinking, rather it appears to be consolidating. The ecosystem’s DNA is changing, favoring commercial execution and operational excellence.

 

This maturing phase may be defined by four core trends:

1. Capital Is Concentrated, Not Gone

The market shows signs of bifurcation. While total funding is down, the median deal size hit a record-high $10.5 million, marking a 50% year-over-year increase. There has been a clear ‘flight to quality,’ with a reduction in occasional or less-focused investors, while high-conviction global funds are placing larger bets on fewer, proven companies. Seed stage funding has become a new “chasm” despite a moderate recovery in capital. The bar for Series A is significantly higher, forcing founders to prove efficacy with their initial capital.

2. Tech as the Resilient and Efficient Economic Engine

The tech sector’s pivotal contribution to the Israeli economy has become more pronounced. In the first half of 2025, the high-tech sector grew by 5.2%, far outpacing 2.0% growth for the overall economy. This resilience is noteworthy as it was achieved alongside volatile total employment numbers, which only recently recovered (+2.3% in H1 2025) from a dip in H1 2024. The ‘aftermath’ of this is efficiency: high-tech GDP per employee grew by 3.9% (H1 2025 vs. H1 2024), solidifying tech’s role as a primary, and increasingly productive, engine for economic growth.

3. AI Is the New Center of Gravity

Consolidation appears to be driven by AI. AI is the ecosystem’s new center of gravity, pulling the entire infrastructure stack with it. This may help explain the continued dominance of Cybersecurity (33% of private funding), which is now a “need-to-have” component of any AI-driven data center. This trend also appears to be fueling growth in data, storage, and deep tech.

4. Strong M&A Signals Enduring Confidence

Ultimately, this “scale-up” strategy is finding validation. The exit market is booming, with M&A value up 4x year-over-year (even excluding mega-deals). This demonstrates that global acquirers are willing to pay a significant premium for Israel’s mature, “scale-ready” companies. Furthermore, this activity signals continued resoluteness from global corporate and financial investors, whose long-term confidence in the ecosystem’s value remains strong despite negative PR cycles.

Key Takeaways for This Maturing Market:

  • For Founders: The Seed stage has become the new chasm. With the median time from Seed to Series A increasing to 35 months, you must raise more capital at Seed to hit the milestones now required for your next round. Plan your runway accordingly.
  • For Executives: Talent requirements have shifted. Your most critical hires are no longer just engineers, but the product and data leaders who can turn your technology into a scalable, profitable business.
  • For Investors: Conviction is everything. The opportunity lies in identifying the next “scale-ready” leaders and bridging the challenging mid-stage gap (Series A/B) with decisive capital.
  • The ‘Talent Pivot’ Trend: The sharp 10.5% decline in R&D roles (Q2 2025 vs Q2 2024) is a significant development, especially as it reverses a 6.3% growth trend seen between Q2 2023 and Q2 2024. This is contrasted by a 36.8% surge in Product, QA, and Data roles, reversing an 11% decline from the previous year. This dramatic flip is a trend to follow closely, as it strongly suggests an accelerated focus on commercialization.

Ecosystem Landscape

Optional H3

In the first three quarters of 2025, Israel’s high-tech private funding sector recorded fewer funding events but larger deal sizes. The estimated number of private funding rounds year-over- year declined from 697 to 580, while estimated total capital raised grew by 18% to $11.9B.

Public funding events rose 18% with a nearly fivefold increase in value from $1.1B to $6.2B. Initial public offering (IPO) activity picked up totaling $1.2B.

Merger and acquisition (M&A) activity also strengthened, with 104 transactions compared to 77, and disclosed deal value rose nearly 5 times to $71.1B from $12.4B in the same period of 2024. M&A exit activity saw a 38% boost in the number of events and a fourfold increase in value from $10.1B to $41B.

Private Companies​

Private Funding Trends

Optional H3

In Q3 2025, Israel’s private tech sector raised an estimated $2.5B across 155 funding rounds, with a median round size of $10.5M. Compared to Q2 2025, both deal values and activity contracted, with total capital raised declining 12% (excluding the $2B Safe Superintelligence round) and the number of rounds down 22%. 

The overall estimated total for Q1–Q3 2025 is $11.9B, a 18% increase compared to Q1–Q3 2024 (including all rounds). The overall estimated number of rounds in Q1–Q3 2025 is 580, a 17% decrease compared to Q1–Q3 2024. These shifts 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. While the number of early-stage rounds decreased from 96 in Q2 to 85 in Q3, total capital invested increased by 45% to $982M. Since 2021, structural shifts in the market have extended the average time between fundraising cycles, a pattern clearly reflected in Q3 2025. These results reinforce the longer-term trend toward fewer but larger transactions, emphasizing company maturity, capital efficiency, and investor selectivity.

Israeli Funding Market Rebalances Toward Fewer, Larger Rounds Amid Global Adjustment

For an objective comparison of Israel’s performance with other regions, only reported private funding metrics are considered, excluding any estimates and outliers.

In Q3 2025, US tech companies raised $78.4B in private funding, a 2% increase from Q2 2025 and 83% higher than in Q3 2024. Excluding outlier deals greater than $1B, quarter-over-quarter funding fell 2%, while year-over-year growth increased by 23%. Deals greater than $1B represented nearly 60% of total deal value in 2025 and accounted for the majority of the sharp year-over-year surge, and without these funding growth remains stable.

Israel’s reported private funding totaled $2.1B , a 38% decline quarter-over-quarter (excluding the Safe Superintelligence round) but a 19% decline compared to the same period in 2024.

The number of funding rounds contracted across all regions. In the U.S. rounds declined 25% quarter-over-quarter and 33% year-over-year, similar to the trend in Israel (23% and 29%, respectively). 

Europe recorded a 21% increase in funding from Q2 and 16% year-over-year, while rounds declined 39% quarter-over-quarter and 46% year-over-year. In Asia, funding increased 20% quarter-over-quarter but declined 13% compared to Q3 2024, while the number of rounds declined 17% from Q2 2025 and 40% from the previous year. 

These trends highlight an ongoing global recalibration in private capital deployment, with varying degrees of contraction across regions.

Israel
USA
Europe
Asia
Scale-Ready Startups Lead Private Funding

Private funding in Q3 2025 was dominated by a concentrated wave of B rounds, with capital flowing into health tech, business software, cybersecurity and fintech. Aidoc, a Health Tech company that improves patient outcomes with AI, led with a $110 million round.  Cybersecurity and Business Software followed with significant rounds including  Noma Security ($100 million) and Decart.AI ($100 million). 

Here is a list of all companies that raised funds during Q3 2025.

High-Ticket Deals Drive a More Balanced Late-Stage Market in Israel

This analysis excludes the $1B Safe Superintelligence round in Q3 2024 and its $2B round in Q2 2025, allowing the fundamental trends to be assessed more clearly.

Mega-rounds accounted for $410 million in funding in Q3 2025, up 290% from Q3 2024. Compared to Q2 2025,levels eased after several large one-time deals in the previous quarter. Mega-rounds made up about 20% of all funding rounds (one in five rounds), down from the unusually high share in Q2, showing a return to a more balanced investment environment. Overall, capital was spread across a wider range of deal sizes, rather than being concentrated in a single large transaction.

Compared with Q3 2024, Q3 2025 showed a healthier and more balanced funding landscape. Investor activity remained steady even as the number of very large deals declined. Overall, the late-stage market remains active but more selective, with capital spreading across a broader range of growth opportunities and momentum continuing beyond last year’s exceptional highs.

Sector Analysis

Sector Mix: Mature Verticals Lead Deal Value

The Q3 2025 sector breakdown shows a clear concentration of capital in mature, high-performing verticals. Cybersecurity led with $769 million raised across 33 rounds, supported by a healthy median deal size of $17 million. The sector continues to draw strong international attention, reaffirming Israel’s position as a global security innovation hub.

Industrial Technologies secured $337 million over 14 rounds, with a median of $18 million, underscoring the capital intensity of companies operating at the intersection of hardware, automation, and advanced manufacturing. Business Software followed closely, raising $330 million across 26 rounds and a more modest median round size of $11 million. Fintech attracted $210 million from 8 rounds, but stood out with the highest median size at $21 million.

Key Sector Landscape Maps

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:

The Fundraising Journey

Israel’s Startup Funding: Longer times, Larger Rounds, and Tighter Funnel

The fundraising journey continues to lengthen, reflecting a market recalibration toward stronger fundamentals and disciplined growth. Between 2014 and 2025, median time-to-next-round increased across all stages. The interval from founding to pre-seed rose from 10 months in 2024 to 12 months in 2025, while pre-seed to seed extended slightly from 14 to 15 months. The seed to series A transition increased from 29 to 35 months, and series A to B maintained 28 months. These longer timelines indicate that startups now face higher thresholds for product–market fit, revenue visibility, and operational efficiency before advancing to subsequent rounds.

Round sizes have grown in parallel. In 2025, the median pre-seed round remained steady at $0.8M, while seed rounds rose to $7M, a 40% increase from 2024. Series A rounds held constant at $17M, and series B climbed from $35M in 2024 to $50M in 2025, exceeding the $40M median recorded in 2022. This rise in later-stage medians highlights a trend of more focused capital deployment, with investors directing larger sums toward companies showing proven maturity, scalable growth, and consistent performance.

Startup Progression: Stronger Early Entry, Sharper Selectivity at Later Stages

For this analysis, we examined the share of startups that raised a subsequent round after their initial funding, capturing how many companies progressed along the funding pipeline. The analysis reflects conditional progression rates, the percentage of companies that, after raising a given round (e.g., pre-seed), successfully advanced to another stage (e.g.,seed + or A+ or B+). Only cohorts with sufficient time to mature are included; thus, No results for start-ups established in 2024–2025 were used as these companies may still evolve as more companies continue their fundraising journey.

Between 2014 and 2023, startup progression rates show a consistent yet selective funding pathway. Around 39% of companies that raised an initial round went on to raise again, a level that held steady across the decade before easing slightly in 2022–2023 to 34%. Early-stage advancement remained limited, with only 6% of startups progressing beyond Pre-Seed and 9% advancing from Seed to later rounds in 2022. Progression to Series A or higher stabilized around 10%, peaking between 2018 and 2021 amid a strong funding climate before softening in recent years. The 2019 cohort stands out for its strong follow-on activity, while 2022–2023 cohorts reflect a more constrained investment environment.

Sector dynamics reinforce these patterns. Business Software remains a steady performer, with balanced progression across rounds and resilience through market cycles, supported by scalable models and sustained enterprise demand. Fintech & Insurtech shows strong early-stage momentum but less consistency at later stages, reflecting the sector’s sensitivity to global valuation shifts and regulatory complexity. Cybersecurity displays notable mid-cycle strength, driven by investor confidence in proven technologies, though recent cohorts suggest more selective follow-on funding. Health Tech & Life Sciences advances more gradually, reflecting long validation cycles and regulatory hurdles that slow capital progression but sustain long-term investor interest. Industrial Technologies and Aerospace & Defense progress less frequently, constrained by extended development timelines and reliance on strategic or corporate capital.

The overall picture is one of a tightening funnel. While more startups can secure an initial pre-seed round, advancing beyond early funding stages has become harder. Capital is concentrated in fewer companies that meet higher thresholds for progression, especially at round A and B. For founders, this means preparing for longer paths between rounds and demonstrating stronger fundamentals before raising the next stage. For investors, it reflects a shift toward more selective, higher-conviction funding deeper in the pipeline.

* Optional comment that usually comes here

Public Companies

Public Companies Funding

Convertible Bonds and PIPEs Dominate

Initial Public Offerings (IPOs): In Q3 2025, IPOs raised $503M dominated by Via’s major exit. Via continued the momentum of eToro’s IPO in Q2 2025 after a long period of no significant Israeli IPOs.

Convertible Bonds: Three companies (Wix, Nova, and Camtek) raised $2.2B in Q3 2025, accounting for 60% of total public fundraising in the quarter, reflecting strong issuer preference for large-scale, lower-dilution financing structures.

Private Investments in Public Equity (PIPEs): PIPE transactions reached $788M across 11 deals, compared with $94M across 12 deals in Q2 2025 and $161M across 17 deals in Q3 2024. This indicates a decline in the number of transactions but much larger average deal sizes, pointing to capital concentration among fewer issuers. It remains an efficient channel for follow-on capital.

Follow-on Public Offerings: Public offerings totaled $168M across 4 deals, down 77% from Q2 2025 ($716M; 7 deals) but higher than Q3 2024, when there was no activity. This follow-on market remains accessible, but with smaller deal sizes and fewer transactions compared to the previous quarter.

 

Overall IPO exits in Q1-Q3 2025 were exceptionally high, reaching $1.2B, approximately 12 times the value recorded in the same period last year, while the number of offerings declined 43% compared to Q1–Q3 2024. Overall public funding increased fivefold year-on-year from $1.1B to $6.2B and the number of events increased 17%.

Finder NASDAQ Index

Finder Index Outpaces Global Benchmarks

Israel’s public tech sector is concentrated in several large firms in line with  global trends. Equal-weight indices provide a balanced representation of performance across all listed tech companies.

Over the 12 months ending September 2025, the Finder Index rose nearly 30%, outperforming the NASDAQ-100 Equal Weighted Index, which gained 12%. Both indices remained in sync through late 2024 and then diverged in 2025.

The Finder Index’s 30% gain was led by strong performances from Elbit Systems, CyberArk, DRS RADA Technologies, Nova Measuring Instruments, and Tower Semiconductor, reflecting momentum in defense, cybersecurity, and semiconductor markets. Mid-cap names such as Oddity, Camtek, and Nayax also delivered notable gains, supported by solid earnings and investor appetite for scalable growth. These advances outweighed declines in select software and renewable energy stocks, including monday.com, Nice, and SolarEdge.

Although Israeli public equities are subject to the same global macroeconomic forces as their international peers, they have demonstrated an ability to deliver superior returns, largely fueled by focused innovation and momentum within key sectors.

Notable Public Companies

In Q3 2025, Israel’s public tech sector value remained concentrated among a limited number of large-cap firms. Based on market capitalization, Elbit Systems, CyberArk and Check Point Software Technologies were the three largest companies with each valued above $20 billion. These were followed by DRS RADA Technologies, Mobileye, monday.com, and Wix with market caps in the $10–12 billion range. While the sector’s market structure remains top-heavy, the equal-weight Finder Index ensures that smaller and mid-cap companies such as Nova Measuring Instruments, Tower Semiconductor, and Oddity are represented. These companies collectively powered the Index’s near-30% rise, providing a balanced measure of public tech performance across segments.

Overall, the market environment favors large, global-ready companies in mission-critical industries, while smaller players are navigating a more cautious investment climate.

Here is a list of all publicly traded Israeli tech companies (on the various stock exchanges) updated daily.

Mergers & Acquisitions

Itamar Golan (Prompt Security)
Itamar Golan
CEO & Co-Founder, Prompt Security

My journey in AI security began after years of working within Israel’s defense and cybersecurity sectors, including Unit 8200 and Check Point. The early exposure to emerging risks allowed me to anticipate and tackle security challenges before AI technologies went mainstream. At Orca Security, I witnessed firsthand the dramatic expansion and risks of AI adoption – traditional security solutions simply weren’t keeping pace.

As adoption rapidly accelerated and new types of attacks emerged, we teamed up and founded Prompt Security to build a product aimed at preventing leaks of sensitive information through popular AI-powered enterprise tools. The demand for our solution was immediate and strong, we gained commercial traction, expanded operations to the U.S., and grew our revenues. Our quick wins led to substantial funding and international expansion.

The product evolved from securing AI usage to comprehensive AI protection – including vulnerability detection and real-time monitoring. Our team expanded internationally and developed modules like automated penetration testing to proactively identify and fix AI model weaknesses pre-deployment.

With Prompt Security’s product experiencing global adoption, we faced a crossroads: scale independently with massive funding or join forces with SentinelOne enabling instant reach and resources. We chose to join SentinelOne because their global reach accelerates our vision of securing AI across every major enterprise worldwide. They respect our culture and product autonomy, allowing us startup agility under a powerful corporate umbrella.

My goal is to establish our platform as the comprehensive AI security standard – covering tool usage monitoring, safeguarding sensitive organizational data, protecting custom AI applications, and continuously identifying new vulnerabilities. This approach includes breadth and depth: adding high-quality new modules with constant adaptation to emerging protocols and attack methods.

Persistence and grit remain the most important success factors for founders. The startup journey is brutal and unpredictable. Those who endure the rollercoaster, maintain vision, and push forward despite setbacks ultimately build game-changing companies. This mindset has carried me and my team through challenges to build an AI security company positioned for global impact.

The Israeli tech ecosystem excels globally in cybersecurity, owing much to Unit 8200’s elite veteran talent. However, Israel still lags in foundational AI infrastructure compared to the U.S. and China. I hope to see an expansion of Israeli deep-tech AI infrastructure innovation, in addition to the thriving application-level startups.

M&A Trends

Landmark Deals Propel 2025 Toward Historic Highs

Global Players Anchor Market Momentum

Israel’s tech M&A market recorded $32B across 33 exits in Q3 2025, the second-highest quarterly total on record after Q1 2025. While the number of transactions remained steady, one large acquisition accounted for the majority of disclosed value: Palo Alto Networks’ acquisition of CyberArk  ($25B).

Excluding large headline acquisitions, 32 transactions contributed nearly $7B in disclosed value. This represents a 112% increase from Q2 2025 and a 33% rise year-over-year, with activity largely concentrated in early- to mid-stage companies. The trend highlights the role of M&A as a driver of technology integration and talent acquisition, reinforcing longer-term market dynamics.

Overall M&A activity in Q1-Q3 2025 was exceptionally high, reaching  $71B (~5X compared to the same period last year), and was primarily driven by the Wiz ($32B) and CyberArk ($25B) acquisitions. This is the highest M&A activity in Israel’s tech ecosystem history.

Broader M&A Exit Activity Reinforces Long-Term Market Strength

In Q3 2025, total disclosed M&A exit value reached $2.1B across 28 deals, down from $3.3B in Q2 and $3.7B in Q1 (excluding Wiz). While quarterly totals have eased, results remain above Q4 2023 levels ($1.1B across 16 deals). M&A exits in Q1-Q3 2025 accounted for $41B (~4X relative to Q1–Q3 2024), continuing the year-over-year upward trend.

This reflects an exit environment that, despite short-term fluctuations, is delivering more consistent outcomes than in 2023 and 2024. Supported by a steady pipeline of early- and mid-stage acquisitions, 2025 is tracking as Israel’s strongest exit year to date.

Notable M&As

M&A Scale and Sectoral Breadth

Recent acquisitions featured on Finder illustrate the breadth of Israel’s technology ecosystem, spanning cybersecurity, fintech, business software, health tech, and aerospace. The largest disclosed transaction in Q3 2025 was CyberArk’s $25B acquisition by Palo Alto Networks, demonstrating the scale of Israel’s cybersecurity industry. Other significant cybersecurity M&As included Aim Security ($350M, acquired by Cato Networks), Findings ($305M, acquired by Diginex), Prompt Security ($275M, acquired by SentinelOne), and Cynerio ($180M, acquired by Axonius).

Fintech activity featured the acquisition of Sapiens International Corporation by Advent International for $2.5B. In business software, Verint Systems was acquired by Thoma Bravo for $2B and Atero AI was acquired by Crusoe for $150M. In health tech, Vectorious Medical Technologies was acquired by Edwards Lifesciences for $497M. SatixFy represented aerospace with a $269M acquisition by MDA Space,. Together, these transactions show Israel’s continued role as a source of strategic technology acquisitions, with cybersecurity leading in both scale and frequency, complemented by meaningful activity across multiple verticals.

Here is a list of all Israeli tech companies that were acquired in Q3 2025

Investors

Eyal Niv (Pitango)
Eyal Niv
Managing Partner, Pitango

The Israeli tech ecosystem is experiencing a significant, AI-driven transformation, with continued growth in investments and exits despite geopolitical challenges. The most dominant trend is the intensifying interest from global tech giants like Google, Nvidia, and Microsoft in Israeli technologies, particularly in deep-tech and the infrastructure for the “new data center”. This boom is a direct result of AI’s rise, which is pulling the entire industry upward. Consequently, sectors such as storage, security, quantum computing, and energy are seeing major successes and have become highly significant. In contrast, industries with a less direct connection to immediate business improvements, such as construction-tech and cleantech, are finding it more difficult to secure funding and grow 

Aligning with these market trends, Pitango has sharpened its focus on seed-stage companies in deep-tech, particularly in AI infrastructure, quantum computing, and energy. The firm was an early investor in startups developing cutting-edge quantum technology such as Quantum Source, and it continues to back advanced AI companies, including AAI Technologies which is developing a groundbreaking deep large reasoning model.

International funds are showing interest in both very early-stage startups (the seed stage which tends to attract consistent attention) and in growth-stage companies that demonstrate significant traction. Companies showing moderate growth at the A and B stages, which previously would have met investor expectations, are now finding it harder to attract capital. 

For founders navigating this landscape, the modern era offers unprecedented tools for early-stage validation. Entrepreneurs can now leverage AI, expert networks, and customer feedback to build a strong case for their business much more quickly than in the past. Furthermore, there has been a fundamental shift in company building, with product-focused roles becoming more central than ever, sometimes even more critical than pure technology roles, in driving a startup’s success.

Looking toward the future, I hold a positive and somewhat counter-intuitive view of AI’s impact on the workforce. Instead of causing mass job replacement, I believe AI will empower individuals, allowing them to take on more complex tasks and leading to greater overall productivity and new business opportunities. Israel is uniquely positioned to capitalize on this, possessing deep knowledge in applying AI technologies effectively. Beyond the impact of AI, there is immense potential in fostering technological and business collaboration with other nations in the Middle East. This regional cooperation is viewed as a powerful business proposition where Israel’s technology and talent can combine with the capital and energy of its neighbors to transform the entire region into a global economic powerhouse.

Investor Trends

Investor Base Narrows

In Q3 2025, 233 investors participated in Israeli tech funding rounds, representing one of the lowest quarterly totals since Q4 2023. This marked a 21% decline compared to Q2 2025 (294 investors) and a 25% decline year on year (311 investors in Q3 2024). The contraction in active investors is consistent with the overall reduction in funding rounds and the trend toward fewer, higher-value transactions.

Global investors accounted for 132 of the participants, down 28% from Q2 and 24% year on year. Israeli investors totaled 101, declining more moderately at 10% quarter on quarter and 27% year on year. As a result, global investors represented 57% of total participants, a share slightly lower than the previous quarter (62%) but broadly in line with 2024 levels.

Global Investor Participation

Global Investor Participation Back to Peak Levels

A total of 135 rounds were recorded in Q3 2025, with global investors participating in 67% of them, slightly down from 70% in Q2 2025 and up from 61% in Q3 2024. This data highlights two parallel trends: overall investor activity has fallen, but the relative share of global investors remains high.

Notable Investors

Local Investors

TLV Partners was among the most active local investors, participating in 8 rounds, including 7 first-time investments. iAngels and Vertex Ventures Israel both followed with 7 rounds, 2 of which were first time rounds. Peregrine Ventures recorded 6 rounds with one first time round and Glilot Capital Partners followed with 5 rounds, 2 of which were first-time investments. Several firms recorded 4 rounds each: Team8 (3 first-time)  Cerca Partners and Picture Capital (2 first-time each), S Capital VC (1 first-time).

Global Investors

Bessemer Venture Partners was the most active global investor in Q3 2025, participating in 6 rounds, all of which were first-time investments. Ibex Investors followed with 5 rounds and 2 first time rounds.  NFX Capital and Norwest Venture Partners followed with 4 rounds each, including 2 first-time investments apiece. Insight Partners and Maor Investments both participated in 3 rounds, with 1 first-time investment.

Several firms recorded 2 rounds each, including Battery Ventures, Maccabee Ventures, O.G. Venture Partners, Samsung Catalyst Fund, and SVCI, all of which were entirely first-time investments.

This activity highlights consistent engagement from leading global funds, with a strong emphasis on first-time investments, particularly from Bessemer and several mid-size funds.

Here is a list of all investors in Q3 2025

Economic Indicators & Impacts

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.

Contribution to GDP and Exports

In Q2 2025, Israel’s high-tech sector continued to support the economy, although the 12-day war between Israel and Iran affected productivity. High-tech employment increased by 2.6% year-over-year, reaching 442K, the highest level ever recorded, indicating that companies continued hiring despite the uncertainty.

At the same time, high-tech GDP grew by only 0.4%, and GDP per employee and exports per employee declined by 2.2%, reflecting lower output per worker and operational constraints. High-tech goods exports fell by 11% compared with Q2 2024, while services exports increased by 8% as digital service delivery was less affected by the conflict. Overall, total high-tech exports declined by 2.8%, with service exports partially offsetting the fall in goods exports.

During the same period, Israel’s total GDP grew by 2.5%, indicating that overall growth was driven primarily by workforce expansion rather than productivity gains. The relatively modest growth of high-tech GDP, combined with the decline in exports, reduced the sector’s contribution to overall economic growth. These figures illustrate the sector’s dependence on international markets and the importance of foreign trade. Sustained access to global demand remains critical for supporting high-tech performance and broader economic growth.

Local Employment Trends

High-tech employment in Q2 2025 showed a modest 1% year-on-year increase, signaling a gradual recovery in the sector. However, the composition of employment shifted notably. R&D roles declined by 10.5%, reflecting continued downsizing in core technical positions, while Product, QA, and Data roles grew sharply by 36.8%, indicating increasing demand for operational and product-focused talent. Business and Administrative roles remained largely stable, with a slight 1.2% decline. This shift toward non-R&D positions supports broader resilience and diversification within the high-tech workforce.

There is also a correction to the decline in Product, QA, and Data roles compared with 2024, when these positions declined significantly.

Employment by Israeli Tech Companies

Startup Nation Central’s Global Employment Indicator provides a comprehensive view of Israel’s high-tech workforce by aggregating professional employment data from over 5,000 Israeli-founded companies worldwide. The Indicator complements official CBS figures by capturing the global footprint of Israeli startups and scale-ups, including employees based abroad.

For Q3 2025, the dataset recorded ~618K employees in Q2 and ~616K in Q3, reflecting a 0.3% quarter-over-quarter decrease following a period of steady growth. This signals a continued recovery from late 2024, when total employment fell by more than 6% before stabilizing in early 2025. While CBS data for Q3 2025 has not yet been released, historical comparisons show consistent directional alignment between the two measures, with the global dataset typically displaying smoother trends and lower volatility than local employment figures.

Summary

In Q3 2025, Israel’s tech ecosystem demonstrated mixed performance, with estimated private funding declining and a high level of M&A activity. Israel’s private funding trends were on par with the U.S. and outperformed Europe and Asia. The Finder NASDAQ Index rose by 30%, and was stronger than NASDAQ-100 EW. 

The outlook for Q4 2025 and beyond will be shaped by several key factors. Regional tensions and macroeconomic challenges may hinder late-stage fundraising and exits, causing IPOs to remain sporadic and valuations pressured. A more selective investor base is raising standards for diligence, traction, and capital efficiency, especially in advanced funding rounds. Tight labor markets in AI, semiconductors, and cybersecurity could increase costs and slow product delivery if not addressed. With capital flowing into fewer companies, disciplined execution in areas like go-to-market strategy and unit economics is becoming vital.

The de-escalation of the Gaza conflict marks a significant turning point for Israel’s tech ecosystem, ushering in a period of relief, uncertainty, and new opportunities. The war had a profound effect on the sector, creating both difficulties and unforeseen prospects. Despite its resilience, the coming months will be crucial for the sector’s complete recovery and its ongoing role in global innovation.

Israel’s deep innovation base, expanding global footprint, and strength in strategic sectors such as cybersecurity, defense, and semiconductors position the ecosystem to navigate uncertainty. Sustained success will hinge on the ability to scale efficiently and retain critical talent, with disciplined execution and capital efficiency as defining advantages.

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Methodology Notes

    • The report is based on the Startup Nation Finder database, with the following exceptions:
      ○ Selected metrics in the Global Comparison and Finder Index sections are based on Pitchbook.
      ○ Selected metrics in the Economic Indicators and Impact section are based on the Central Bureau of Statistics survey data
    • The report offers a snapshot of Q3 2025 activity as of Sep 28, 2025. Data might be further updated in the future. As a result, figures in this report may differ from figures in prior (and future) published reports.
    • The definition and criteria for companies and investors can be found in the Finder Glossary.
    • Active Investors are defined as investors with at least 1 investment round in Q3 2025.
    • Aggregate metrics may include rounds that are not visible in Finder, per the request of the profile owners.
    • Funding Type definitions:
      ○ Private Funding includes the following round types: Pre Seed, Seed, A, B, C, D, E, F, G Rounds, Convertible Debt, SAFE, Equity Crowdfunding, and Undisclosed rounds.
      ○ Funding for Public companies includes the following event types: IPO (including IPO via SPAC or Reverse Merger), Non-Initial Public Offering, PIPE, Convertible Bonds.
      ○ The following events are excluded: Crowdfunding, Debt Financing, Secondary, and Grants.
    • Some Finder lists are dynamic and provide current snapshots. Hence the results might not match the figures in the report.
    • The Finder Index is an index calculated by Startup Nation Central, based on Israeli companies traded in NASDAQ with a $50 million market cap minimum threshold and using an equal-weighting methodology.
    • Figures may be revised based on expanded data availability and future methodology enhancements for the Global Employment Indicator and the Fundraising Journey analyses.
    • The Fundraising Journey analysis:
      ○ Israeli metrics are calculated based on the values of Pre Seed, Seed, A and B Rounds and the median time from the prior round.
      ○ Months to the next round are measured from the last round’s date; if a round is skipped, the most recent round date is used.
      ○ Definitions of funding stages align with those used in Finder. Durations between rounds are approximate.
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About Us

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.

A special thanks to Dr. Sergei Sumkin, Senior Researcher at the Aaron Institute for Economic Policy, for his continuous contribution to the Economic Indicators & Impacts chapter.

We wish to also thank Assaf Zvaig for his valuable contributions to the report.

Have a great day!