Fundraising has fallen to its lowest level in a decade in terms of the number of transactions, but AI and cybercrime have attracted an unprecedented concentration of capital.
Although Israel has been at war throughout 2025, culminating in an economic shutdown during the Twelve Day War with Iran, the performance of the local high-tech sector points to a strong year, with trends largely aligned with developments in the United States.
According to preliminary data from Startup Nation Central’s 2025 roundup, Israeli startups raised $15.6 billion during the year, while exits totaled $74 billion. These numbers are high and signal a return to some normality. Fundraising was slightly higher than in 2022, but remains well below the exceptional levels of 2021, when Israeli startups raised $27 billion.
All numbers are accurate as of mid-December, meaning 2025 could still close out with even higher totals, especially on the release side. Cybersecurity unicorn Armis is negotiating a sale to software giant ServiceNow for $7 billion. The new influx of capital into Israeli high-tech, although the Wiz and CyberArk transactions have not yet been finalized and the products have not been transferred, is also contributing to the strengthening of the shekel against the dollar, echoing the trend observed in 2020 and 2021.
Yet the defining story of 2025 lies not in the big numbers, but in the internal makeup of the market. The AI revolution has reached Israel and is reshaping investment dynamics: the number of financing rounds has sharply decreased, while deal sizes have increased. Fundraising fell to just 717, the lowest level in a decade, but half of all capital raised went to deals above $100 million. Until recently, these mega-towers were rare. In 2024, they represented 41% of the total collection, and in 2023 only 22%. The median funding round increased to $10 million, an increase of 67% from 2024.
This shift suggests that investors are making fewer deals, but committing much larger sums to companies they view as category leaders. It also reflects foreign investors’ continued confidence in Israel’s technology sector and the broader economy, even amid protracted conflict.
On the M&A front, even excluding one-off deals, Google’s $32 billion acquisition of Wiz and Palo Alto Networks’ $26 billion purchase of CyberArk, the total value of exits increased 12% from 2024. The number of exits stood at 150 deals, roughly in line with the previous year.
The sectoral distribution holds few surprises. Enterprise software, including companies developing artificial intelligence applications, led fundraising with $4.5 billion. Cybersecurity followed closely, collecting $4.1 billion, up from $3.9 billion a year earlier. Cyber stood out with a median transaction size of $20 million, double that of enterprise software. In terms of deal numbers, the healthcare sector emerged as a notable bright spot, seeing a record 152 funding rounds, the highest of any sector, driven in part by renewed interest in AI-based 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 from companies such as Wix and Check Point, raising capital for the first time since its IPO three decades ago, an additional $10.3 billion was injected into Israeli companies.
Nine funding rounds exceeding $200 million were completed during the year, led by cybersecurity company Cyera, which raised a total of $940 million in two rounds in May and December. Excluding rounds above $200 million, total capital raised in 2025 further increased by 18% compared to 2024.
Cybersecurity and generative AI dominated funding activity throughout the year: 40% of all funding rounds took place in these sectors, accounting for approximately 70% of total capital raised. Financial technology and defense technology companies also stood out, albeit in lower volumes. Even excluding one-off mega-rounds above $100 million, cybersecurity fundraising in 2025 exceeded levels seen in 2021, one of the strongest years on record for Israeli tech investments.