On October 7, when Hamas brutally entered Israel and the Gaza war began, there was a pause in all Israeli high-tech deals, leading to worries about the competitiveness of local high-tech companies compared to firms in more politically stable nations globally.
However, Startup Nation Central’s new analysis, released Sunday and based on data published on its Startup Nation Finder platform, indicates that Israel’s high-tech sector has remained “strong and stable.”
“Despite significant challenges, such as a decrease in human capital by about 15% due to military enlistment and short-term funding gaps affecting small startups, the Israeli technological ecosystem demonstrates resilience, continuing to attract investments, investors, and venture capital activity,” Startup Nation Central said.
According to the data, since October 7, there have been 220 private investment rounds worth around $3.1 billion, with an average investment of around $19 million.
The data showed that health technologies led in the number of investment rounds, followed by software solutions and security technologies.
IN JANUARY, Bill Ackman and his wife Neri Oxman bought 4.9% of the Tel Aviv Stock Exchange for $25 million in a move that signaled confidence in the Israeli economy. The writer asks: What if similarly influential businesspeople set aside a cumulative investment of $1 billion in Israeli tech startup (credit: AMIR COHEN/REUTERS)
The leading sector in fundraising amounts was security technologies, with nearly $1.1 billion raised.
Mergers and acquisitions since October 7 were worth $3.7 billion, including two large acquisition deals of nearly a billion dollars each. Public data shows that companies were sold for over $1.5 billion in March alone.
“We’ve seen the tech sector rebound from zero, with much larger fundraising volumes compared to the same period a year ago,” said Itay Rand, a general partner at 10D, in a separate release. “In terms of investments, there was almost no activity in the market during October-November, but in the current quarter, we’re seeing a return of global funds interested in Israel.”
He said, “Israeli tech is in great momentum; many employees have returned from reserve duty in recent weeks, feeling their presence in startups where, thanks to human capital, they’re progressing faster.”
AdvertisementRegarding investments in Israel in general, Startup Nation Central showed that the downward trend matches that of the United States. However, new money is also coming into the country.
New funds continue to enter the country
The Startup Nation Central report showed that more than 20 new funds have been established since October 7, raising a total of $1.7 billion. Of these, 11 funds were established to address the urgent funding needs of startups facing financial challenges due to the war’s impacts.
Israeli tech has been operating under the slogan “Israeli tech delivers no matter what,” focused on the US market. Companies have told The Jerusalem Post in various interviews that the concept is working.
Pavel Gurevich, who recently sold his cyber security company for $600 million to Akamai and now manages its operations in Israel, said that the continued performance of the Israeli tech elite “is primarily a tribute to entrepreneurs and Israeli techies who succeed in creating breakthrough technology, building companies, and selling them under such conditions.”
