Photo by
Tahel Rubin/TPS-IL on 4 November, 2019
Israeli Tech Funding Hits Three-Year High, Fueled by Enterprise Software and Mega M&A Deals
Jerusalem, 30 June, 2025 (TPS-IL) -- Israeli high-tech companies raised $9.3 billion in private capital during the first half of 2025, marking the strongest six-month period for the sector since 2021, according to a mid-year analysis published Monday by Startup Nation Central. The 54% surge in funding compared to the second half of 2024 highlights a continuing recovery that gained momentum in the second quarter of the year, even amid the country’s ongoing security challenges.
The new figures, based on data from Startup Nation Central’s Finder platform, show a striking rebound that began in late 2024 and picked up pace in early 2025. Capital inflow rose from $3.3 billion in Q1 to $6 billion in Q2, despite a decrease in the number of deals, which fell from 214 to 151.
“This data proves that the market continues to price in long-term confidence in Israeli tech, even amid a complex security reality,” said Avi Hasson, CEO of Startup Nation Central. “Just last month, during the lead-up to and throughout the campaign against Iran, we saw 31 funding rounds, providing clear evidence that entrepreneurs are still building and investors still remain confident.”
The upswing in capital came even as overall deal volume declined by 10% compared to the previous six months. Still, the average round size increased by 28% to $9 million, reflecting what analysts described as a shift toward larger, more mature rounds and a more discerning investment climate.
“Fewer deals, but each round is larger and more focused,” said Yariv Lotan, Startup Nation Central’s VP of Digital Products and Data. “Even at the early stages, there’s a recovery: pre-seed and seed investments rose 50%, from $406 million to $607 million, along with a 60% increase in mid-stage rounds. These, along with active dealmaking in stealth-stage companies, reinforce the ‘startup baby boom’ trend we pointed to at the end of 2023.”
Enterprise software led all tech sectors with $3.19 billion raised across 71 rounds. Cybersecurity followed closely with $1.98 billion from 56 deals, a number that would have topped the list had it not been for a $2 billion Series B raise by Safe Superintelligence (SSI), one of the largest funding rounds in Israeli history. Fintech companies attracted $751 million, boosted by a $500 million raise by payments platform Rapyd, while health tech logged the highest number of deals — 69 — but only $623 million in funding, mostly at the early stage.
Mergers and acquisitions were another standout feature of the first half of the year, reaching a record-breaking $39.2 billion. Google’s $32 billion acquisition of cybersecurity firm Wiz was the headline deal, but other major transactions included Next Insurance’s $2.6 billion sale and Melio’s $2.5 billion exit. Even excluding the Wiz acquisition, M&A activity remained strong at $7.2 billion, with 60 first-time acquisitions — the most since early 2022. Global strategic buyers led 51% of these deals, while 42% came from Israeli acquirers.
Public capital markets also showed renewed energy, with 13 transactions totaling $1.6 billion — up from $200 million in the second half of 2024. The standout was eToro’s long-awaited IPO on Nasdaq, which saw its stock jump more than 30% after listing, marking the first major Israeli tech IPO in years.
Investor participation remained broad, though the number of unique investors declined by 12% to 447. Global investors continued to dominate, participating in 69% of all rounds — up from 61% in late 2024. Israeli firms iAngels and Pitango were the most active local players, each involved in 15 deals.
“The strength of the shekel, positive market trends, and the strong presence of global players, both in VC and strategic acquisitions, all reflect the market’s view of Israel’s medium and long-term economic potential,” said Hasson. “This is yet another sign that Israeli technology, with its unique characteristics and capabilities, remains a valuable force in the global market.”
A full version of Startup Nation Central’s report is expected in mid-July.
