Foreign investments in Israeli tech companies continue to increase despite prolonged Gaza War, Iran strikes

Israeli tech companies and startups succeeded in raising $9.3 billion during the first six months of 2025, according to data report compiled by Startup Nation Central, an organization that monitors developments and supports the Israeli tech industry.

The inflow of foreign investments into Israeli startups increased by a whopping 54% compared to the same period in 2024 when Israeli companies raised some $6 billion. Overall, the new figure indicates the best year for investments in the Israeli tech industry in three years and it materialized despite the ongoing war against Iran and its various terrorist proxies. 

Startup Nation Central CEO Avi Hasson said the new data “proves that the market continues to price in long-term confidence in Israeli tech, even amid a complex security reality.”

“During the lead-up to and throughout the campaign against Iran, we saw 31 funding rounds, providing clear evidence that entrepreneurs are still building and investors still remain confident,” Hasson assessed. “The strength of the shekel, positive market trends, and the strong presence of global players, both in VC and strategic acquisitions, all reflect the market’s view of Israel’s medium and long-term economic potential."

The new data revealed that software companies succeeded in raising $3.19 billion divided across 71 financing rounds during the first two quarters of 2025. Cybersecurity companies came in second, raising $1.98 billion across 56 deals. Fintech startups came in third, securing $751 million across 29 rounds.

The AI startup Safe Superintelligence, which was established by OpenAI’s ex chief scientist Ilya Sutskever, stood out among the large deals, attracting $2 billion investments. 

Looking ahead, Hasson expressed cautious optimism about the future. 

“This is yet another sign that Israeli technology, with its unique characteristics and capabilities, remains a valuable force in the global market.”

Known as the "Start-Up Nation," Israel has one of the largest concentrations of tech startup companies in the world outside Silicon Valley, California. While the Israeli tech industry only employs a little over 10% of the local workforce, it constitutes the growth engine in the Israeli economy. Israeli tech companies contribute some 50% of Israel’s total exports. 

There have been local and international concerns that the ongoing war would threaten the Israeli tech industry’s long-term viability. 

However, an early 2024 poll conducted by accounting firm Ernst & Young, indicated that some 60% of all multinational companies with operations in Israel expressed confidence in the local Israeli tech industry. 

Without dismissing ongoing challenges, prof. Yossi Matias, CEO of the Google Research and Development Center in Israel, welcomed the international confidence in the Israeli tech scene. 

“Looking ahead to 2024, despite the challenging period, part of our essential role, is to be optimistic as some of us impact what will happen in the future, and I allow myself to be optimistic despite the difficulties and despite what we are going through and experience,” Matias stated.

The year has even boosted some tech sectors, most notably the Israeli Cybersecurity industry, which has been busy developing countermeasures against the growing cyberattacks by Iran and its various proxies. 

The ongoing war has also showcased many of Israel’s technological military capabilities to an audience of international buyers.