Roadshow+
"We must preserve Israel’s venture capital funds to keep high tech on track"
Israeli venture funds are facing one of the toughest periods in the history of local high-tech. A slowdown in fundraising, the growing presence of U.S. early-stage investors, and rapid shifts in AI are rewriting the rules of the game. Ahead of Calcalist’s Roadshow+ event, senior industry leaders discuss the next growth engines, Israel’s comparative advantages, and how to preserve the ecosystem’s independence.
It has become harder than ever for early-stage entrepreneurs to close investment rounds. The year 2025 marks a sharp slowdown in venture capital fundraising in Israel. In the first half of the year, Israeli funds raised only about $260 million, a pace 60% lower than last year. According to the latest IVC funds report, the total capital available for new investments stands at $11 billion, of which about $3 billion is earmarked for new companies.
“Alongside these figures, American funds are not disappearing from the early stages. On the contrary, they are also entering Seed and Series A rounds and do not hesitate to take risks when they identify potential for a global category. Their advantages are clear: financial strength, higher investment capacity, and the ability to support companies throughout their entire growth trajectory,” said Michal Kissos Hertzog, CEO of Poalim Tech. “Nevertheless, Israeli funds have a critical, irreplaceable role that is essential for the survival of the entire ecosystem,” she said in an interview ahead of the Calcalist and Poalim Tech RoadShow+ event.
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Michal Kissos Hertzog (from right), Pavel Livshiz, Aya Peterburg, and Kobi Samboursky.
(Ben Hertzog, Sharon Levin, Ben Itzhaki, Hetz Ventures)
The RoadShow+ event, to be held on November 25, 2025, at Expo Tel Aviv (invite only), will connect pre-seed to Series A companies with top Israeli investors, creating an opportunity for selected entrepreneurs to hold a concentrated series of one-on-one meetings with partners at some of Israel’s leading venture capital funds.
Kissos Hertzog warned that the government is not doing enough to strengthen local venture capital. “Israeli funds are always here. They are not tourists who arrive in good years and disappear in times of crisis. They are part of the ecosystem, with a responsibility to build it over time. American funds may have representative offices in Israel, but that is no substitute for a fund whose partners all sit here and experience the market every day: they grew up together, served in the army, or studied at university together. This familiarity matters.”
She added: “Israeli funds tend to look not only at cyber and AI, the two areas that have received the most attention in recent years, but also at other technologies being developed here, such as defense, healthtech, foodtech, fintech, hardware, and industrial deeptech. These areas usually require investors with deep expertise, patience, and local market connections to break into global markets. Israeli funds are often the first to recognize the spark in these niches long before they become ‘hot’ internationally.”
“And right now there is a failure in the Treasury’s approach,” she said. “It is true that the Innovation Authority has launched important initiatives with matching mechanisms and incentives. But that is not enough. This is not only about allocating resources, it requires a government mindset. At the moment, in my view, the government is not prioritizing the strengthening of local venture capital funds as a strategic goal. If this policy continues, the market will be left to operate freely without a guiding hand, and the implications are clear: American funds with deep pockets will dominate the early stages in areas that interest them, while Israeli funds, lacking the same resources, will struggle to remain significant players.”
Pavel Livshiz, a partner at Hetz Ventures, believes cyber will continue to lead Israeli exits but sees the next engine of growth in data infrastructure. “The data sector is undergoing a transformation similar to what cyber went through in the last decade, in terms of the talent founding companies, the sales model, and the ability to generate returns well before an IPO,” he said.
He also highlighted the added value of local funds at the seed stage. “Over the years, we’ve built a broad network of over 150 global experts at Fortune 1000 companies who work closely with our portfolio. This enables startups to reach product-market fit in a systematic and accelerated way. That kind of hands-on involvement is not trivial and is something American funds typically do less of at the seed stage.”
Aya Peterburg, founder of the S Capital fund, warned that while “Israel is a global leader in cyber and this is a strategic asset for our economy, if we focus only on it, we will miss huge opportunities in other areas.” She noted that today’s trillion-dollar companies, Nvidia, Google, Amazon, Microsoft, Meta, and Apple, are not cyber firms. “To create global giants in Israel, we must maintain our edge in cyber while also investing in other centers of excellence, AI infrastructure, robotics, fintech, and defense-tech.”
Peterburg emphasized that cyber startups often have an easier time generating early revenues thanks to established sales pipelines and existing budgets. In contrast, AI budgets are still maturing, making it harder to convert proofs of concept into contracts.
“In terms of valuations, cyber enjoys strong multiples, but AI companies, especially infrastructure and model developers such as Anthropic and OpenAI, are valued even higher than cyber firms,” she said.
Kobi Samboursky, founder and managing partner of Glilot Capital, the first Israeli fund focused on cyber, said the combination of cyber and AI is now creating especially large opportunities. “But not only in cyber, AI is reshaping enterprise software and creating major opportunities across infrastructure and applications.”
According to him, “Israelis have always been quick to grasp profound changes and implement them faster than others. The same applies to AI. Israeli entrepreneurs are already recognizing the opportunities it brings, on top of our strengths in cyber. Right now, we are focusing mainly on the intersection of cyber and AI, where our advantages are clear.”
Despite the challenges, Samboursky said 2025 is one of his fund’s strongest years. “We saw 60% growth in Israeli exits in 2024, and in 2025 that number will be four or five times larger. There’s no reason this trend won’t continue, especially once today’s turmoil subsides. We have a world-leading industry in several fields, and it will continue to deliver in the years to come.”
Peterburg, too, remains optimistic. “Israeli industry is known for emerging from crises stronger. This time will be no different: we’ll see more selective, higher-quality fundraising; an increase in mergers and acquisitions; and accelerated growth in defense-tech and AI infrastructure,” she said. “But entrepreneurs who fail to leverage AI wisely will not survive. Israel’s advantage lies in creativity under constraints and systemic thinking. Now is the time to turn that into the next growth engine of high-tech.”
Israeli high-tech is about more than technological innovation, concluded Kissos Hertzog. “This week we heard about a half-billion-shekel public diplomacy program to strengthen Israel’s image abroad. But we must remember that today, we already have the strongest calling card: Israeli high-tech. It tells the world a story of creativity, courage, and the ability to turn small ideas into global realities. To keep this engine running, we must preserve Israel’s venture capital funds, the tracks on which this industry has always run.”
