Israel’s tech ecosystem defies uncertainty with $2.13 billion raised in Q1
Cybersecurity and mega-rounds propel sector growth despite cautious new investments.
Israeli high-tech companies raised $2.13 billion in the first quarter of 2025, marking a 24% increase from the same period last year, according to initial data from the latest LeumiTech and IVC high-tech report. The cybersecurity sector played a pivotal role, accounting for 25% of all funding rounds and an impressive 42% of total capital raised.
This surge in capital comes amid growing confidence in Israeli technology, particularly in the wake of Google’s landmark $32 billion acquisition of Wiz. Analysts suggest that the deal has reinforced Israel’s standing as a global cybersecurity powerhouse and helped attract further investment to the sector.
Two major fundraising rounds exceeding $200 million each played a significant role, with Rapyd's $250 million round (in addition to raising $250M in debt) and Island's $250 million in funding, accounting for 24% of the total capital raised. Excluding these rounds, total funding still grew by 8% compared to Q1 2024, indicating steady expansion across the broader market.
A shift toward follow-on investments
While the overall funding volume increased, the number of completed rounds declined by 10% compared to Q1 2024, with only 96 known rounds recorded. However, IVC estimates that when including undisclosed or stealth rounds, the total number of transactions could reach 200.
A key trend in Q1 was the increase in follow-on investments, signaling that investors are focusing on strengthening existing holdings rather than backing new startups. "We started the year with the Wiz deal, which is exceptional by any historical standard," said Maya Eisen-Zafrir, CEO of LeumiTech. "I hope the positive sentiment we’re hearing from foreign investors will translate into momentum for the rest of the year."
Guy Holtzman, Chairman of IVC, echoed this sentiment: "Despite the slowdown in new investments, we’re seeing a strong willingness to continue backing existing companies, which reflects deep confidence in Israeli tech—even in uncertain times."
