The ongoing tensions between Israel and the Arab world notwithstanding, private tech firms in Israel have raised $9.58 billion in 2024, compared with $6.9 billion in 392 deals in the previous year.
In its latest report, IVC-Leumitech, is generally optimistic despite a 4% fall in fund raising in the fourth quarter of 2024 from the preceding quarter although the amount raised was 60% higher than the corresponding quarter of 2023, when the war broke out.
While IVC has been analysing Israeli technology and venture capital trends for over 23 years, Leumitech is the high-tech banking arm of the Leumi Group and the leading financial platform for the high-tech industry in Israel.
The preliminary data released by IVC-Leumitech on the Israeli Tech Review report for the fourth quarter and 2024, also showed that total funding raised in the fourth quarter of 2024 surged by approximately 60% compared with the same period in 2023, with a 44% rise in the number of deals.
Mega-rounds (over $100 million each) accounted for 48% of the total funds flowing into the local tech sector this year. Even excluding these rounds, 2024 showed growth compared to the previous year. The report also revealed that the cybersecurity sector stood out in 2024, with total fundraising in the field representing 38% of the year’s total.
In Q4-2024 alone, 22 fundraising rounds in cybersecurity amounted to approximately $850 million, about 36% of the total capital raised during the quarter. Investor involvement stabilized in 2024, remaining at a level similar to 2018–2019, though the number of new investors continues to decline.
According to the report, there was a rise in the number of Israeli investors in early 2024 compared with the third quarter of 2023, when war broke out, and the number of investors reached 229, but gradually decreased towards the end of the year, and now stands at a number even lower than in the months after October 7.
Challenging Year
LeumiTech CEO Maya Eisen Zafrir said that in summarising the challenging year they have been through, they were witnessing the return of Israeli high-tech to growth in the main parameters, which illustrates its strength and quality.
She said that there were companies that already knew how to translate the technologies that were born – or tried in – the war into actual deals, along with the adoption of innovative work methods that were often born as a result of these challenging times.
“These give high-tech an excellent starting point for the coming year. The reduction in the interest rate in the US also gives a tailwind to Israeli high-tech, which is greatly affected by macro conditions, and we expect that 2025 will continue this trend,” she added.
IVC CEO Ben Klein said that no matter how they looked at the data, 2024 ended with a clear growth trend in Israeli high-tech. The challenges facing the local industry were well known, but it seems that high-tech is succeeding in coping and continuing to be the growth engine of the Israeli economy, he added.
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