Israeli startups raised $15.6 billion in 2025 as AI drove bigger, more concentrated bets
Fundraising fell to a decade low in deal count, but AI and cyber attracted unprecedented capital concentration.
Although Israel was at war throughout 2025, culminating in a summer economic shutdown during the Twelve-Day War with Iran, the performance of the local high-tech sector points to a strong year, with trends broadly aligned with developments in the United States.
According to preliminary data from Startup Nation Central’s 2025 summary, Israeli startups raised $15.6 billion during the year, while exits totaled $74 billion. These figures are high and signal a return to a measure of normality. Fundraising was slightly higher than in 2022, though still far below the exceptional levels of 2021, when Israeli startups raised $27 billion.
All figures are accurate as of mid-December, meaning 2025 may yet close with even higher totals, particularly on the exits side. Cybersecurity unicorn Armis is negotiating a sale to software giant ServiceNow for $7 billion. The renewed inflow of capital into Israeli high-tech, although the Wiz and CyberArk transactions have not yet been completed and proceeds have not been transferred, is also contributing to the strengthening of the shekel against the dollar, echoing the pattern seen in 2020 and 2021.
Yet the defining story of 2025 lies not in the headline numbers, but in the internal composition of the market. The AI revolution has reached Israel and is reshaping investment dynamics: the number of funding rounds has fallen sharply, while deal sizes have surged. Fundraising rounds dropped to just 717, the lowest level in a decade, but half of all capital raised went into deals larger than $100 million. Until recently, such mega-rounds were rare. In 2024 they accounted for 41% of total fundraising, and in 2023 just 22%. The median funding round jumped to $10 million, a 67% increase compared with 2024.
The shift suggests that investors are doing fewer deals, but are committing far larger sums to companies they view as category leaders. It also reflects sustained confidence among foreign investors in Israel’s technology sector and broader economy, even amid prolonged conflict.
On the mergers and acquisitions front, even excluding exceptional transactions, Google’s $32 billion acquisition of Wiz and Palo Alto Networks’ $26 billion purchase of CyberArk, the total value of exits rose 12% compared with 2024. The number of exits stood at 150 deals, roughly in line with the previous year.
The sectoral breakdown holds few surprises. Enterprise software, including companies developing artificial intelligence applications, led fundraising with $4.5 billion. Cybersecurity followed closely, raising $4.1 billion, up from $3.9 billion a year earlier. Cyber stood out for its median deal size of $20 million, double that of enterprise software. By number of transactions, healthcare emerged as a notable bright spot, recording a record 152 funding rounds, the highest of any sector, driven in part by renewed interest in AI-enabled medical technologies.
For the first time since 2021, Israel also saw a return to large IPOs, with Navan, eToro and Via going public. Combined with convertible bond offerings by companies such as Wix and Check Point, raising capital for the first time since its IPO three decades ago, an additional $10.3 billion flowed into Israeli companies.
Nine funding rounds exceeding $200 million were completed during the year, led by cybersecurity company Cyera, which raised a combined $940 million across two rounds in May and December. Excluding rounds above $200 million, total capital raised in 2025 still grew by 18% compared with 2024.
Cybersecurity and generative AI dominated funding activity throughout the year: 40% of all funding rounds were in these sectors, accounting for roughly 70% of total capital raised. Fintech and defense-technology companies also stood out, though at lower volumes. Even excluding exceptional mega-rounds above $100 million, cybersecurity fundraising in 2025 exceeded levels seen in 2021, one of the strongest years on record for Israeli tech investment.
