Israeli tech faces fundraising challenges, private investors step up

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Concerns regarding Israel’s political and economic stability have introduced new challenges for fundraising in the tech sector. In response, angel investors and investment clubs are stepping up to offer late-stage investment opportunities to fill the gap.

Recent reports from Israel’s Innovation Authority and Start-Up Nation Central (SNC) highlight the impact of geopolitical turbulence on Israel’s tech-driven economy. While Israeli high-tech continues to lead globally in Nasdaq-listed companies per capita and ranks third in capital raised—following Silicon Valley and New York—there has been no growth in the sector’s capital raising between October 2023 and August 2024. In fact, 49% of tech companies surveyed by SNC reported that investors had canceled their commitments, while only 31% expressed confidence in their ability to raise funds in the coming year.

While the government has been advised to take measures such as regular economic monitoring, increasing public investment, and improving stability, private initiatives are already rising to meet the challenge. A notable development is the emergence of private angel and investor clubs like Catalyst Investors’ Club (CIC), which are helping to sustain investment momentum in the tech ecosystem.

JPost has recently partnered with Catalyst Investors’ Club to allow JPost readers to join in on our efforts to boost the Israeli hi tech eco system in times of crisis. The platform is also accessible through the JPOst Business & Innovation section. We interviewed chairman and CEO Edouard Cukierman to learn more about this important initiative.   

“We initiated the ‘Catalyst Investors’ Club’ (CIC) prior to the war,” says Cukierman, “The demand for this unique platform became clear from our longstanding dialogues with the investors we’ve worked with over the years. Many of them expressed a desire for a more direct gateway to Israeli innovation and private investment opportunities in exclusive ventures, particularly in late-stage companies. When the war broke out, we saw an urgent need to accelerate the platform’s launch and deliver a much-needed boost to the Israeli tech ecosystem during this time of crisis.”

(credit: Catalyst Investors’ Club )

Catalyst Investors’ Club is an exclusive investment platform designed to provide private investors access to late-stage opportunities, deals that are typically reserved for venture capitalists. CIC collaborates with lead investors who have already conducted thorough due diligence, ensuring that investors are engaging with well-vetted, high-potential opportunities. The platform features over 250 companies in its video-on-demand (VOD) library, which offers short, dynamic videos categorized by technology sectors. This allows potential investors to explore Israeli innovations and identify investment opportunities in a highly engaging format.

Companies can apply to present their technologies for free, and viewers can explore the innovations, actual investment opportunities are available only to club members. These members must sign up and self-declare as qualified investors to gain access to CIC’s actionable deals, providing an exclusive and carefully curated experience for those seeking to support Israel’s tech sector.

Founded by Cukierman & Co. Investment House (CIH) and Catalyst Fund, CIC draws on the strengths of two of Israel’s leading investment institutions. CIH has raised over $10 billion for the Israeli tech ecosystem over the last 30 years, while Catalyst Investments, led by Edouard Cukierman and Yair Shamir, stands as one of the country’s longest running and most successful venture funds, known for their strategic, hands-on investment approach.

Interview with Edouard Cukierman

Question: After 30 years of investing in Israeli tech, what are your insights on the current reality?*

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Answer:  

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The current reality is marked by both challenges and opportunities. On one hand, the geopolitical instability has clearly affected investor confidence, and we’re seeing hesitation in commitments, as reflected in the recent reports. However, the resilience of Israeli innovation remains strong. Over the past three decades, we’ve witnessed how crises often lead to breakthroughs, and I believe this moment is no different. Israeli companies, especially in sectors like cybersecurity, AI, and health tech, are continuing to innovate at an impressive rate. What’s different now is that investors are being more cautious, seeking later-stage, more mature companies where the risks are lower and due diligence has already been done. That’s where CIC comes in—offering a streamlined, secure way to invest in vetted opportunities. In times of uncertainty, having the right platform to connect investors with companies that have passed rigorous checks is crucial.

Question: Who are the investors in your club?

Answer:  

Over the past 30 years, we have built a robust global network of investors. We organized over 30 international conferences called Go4Israel with over 1000 investors in each event, presenting state of the art technologies from Israel to overseas investors. Now we offer those private accredited investors to access the Israeli deal flow via our CIC platform.Our partnerships with other investor and angel clubs, such as Italian Angels for Growth (IAG), the largest angel club in Italy, have further expanded our reach. We built other cooperation with International private banks interested in offering to their clients a unique access to investment opportunities in private technology companies.

With the launch of CIC, we’ve attracted a new wave of interest, particularly from Jewish communities worldwide who are eager to support Israeli innovation. These investors range from high-net-worth individuals and family offices to institutional investors who see the value in Israeli tech. With CIC, they are gaining unprecedented access to vetted late-stage opportunities, allowing them to support the ecosystem even during these challenging times.

Question: Amidst the war, antisemitism is on the rise. What can be done to minimize its impact?

Answer:  

Unfortunately, antisemitism is indeed on the rise, as reflected in disturbing reports from college campuses and data from the Anti-Defamation League, which shows a significant increase in hate crimes against Jewish populations. The war has also added logistical challenges, with airlines suspending routes to Tel Aviv, making it harder for international investors to engage with Israel in person. However, CIC is helping to counter these obstacles. By offering a digital gateway to Israeli innovation, we’re enabling foreign investors to connect directly with Israeli entrepreneurs. Through the platform, members can view founder pitches and detailed videos about the companies, providing a sense of connection and trust that transcends geographical barriers. In this way, we’re fostering a global network of support for Israel’s tech sector, despite the physical and societal challenges.

Question: How long do you anticipate this crisis will last, and what are the long-term implications for the Israeli tech sector?

Answer:  

Based on past experience, Israeli tech has shown incredible resilience during challenging times. The country has weathered conflicts, economic downturns, and global financial crises, always emerging stronger. 

In the short term, I expect the current crisis to create further hesitation among investors, particularly those less familiar with the region. This period of uncertainty may last anywhere from 12 to 24 months, depending on how quickly stability returns. That said, crises often accelerate innovation in Israel. Companies will adapt, become leaner, and focus on high-impact technologies with immediate market relevance, especially in defense, cybersecurity, and health tech, where global demand is strong.

In the long term, I’m confident that Israel’s tech sector will continue to thrive. The foundational strength of the ecosystem, coupled with the entrepreneurial spirit of Israeli innovators, means that the country will remain a global leader in technology. The rise of platforms like CIC will also help bridge the gap during this time, offering investors secure, vetted opportunities in the later stages of growth. Once the crisis stabilizes, we may even see a surge in investments, as investors will seek to capitalize on the innovations that emerged during this difficult period. The key is staying engaged, even in the face of uncertainty, as history shows that crises often create opportunities for those willing to take a long-term view. 

This article was written in cooperation with Catalyst Investors’ Club

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