As a venture capital investor (previously at Google Ventures and now with my firm, Remagine Ventures), I’ve always been drawn to the Israeli tech scene. The “Startup Nation” has a reputation for grit, innovation, and an uncanny ability to thrive in the face of adversity. 2024 was a stark reminder of this truth.
The year was difficult in almost every account. Startups are hard as it is, but add on top a war on multiple fronts (with rocket sirens almost daily and significant part of the workforce tied to reserve service), less international investors traveling to Israel, uncertainty for clients, and so on and so forth. You get the picture. With the amount of pressure the economy and country were under, it would have been reasonable to expect that 2024 would be a dud year for Israeli tech. Yet, amidst the turmoil, something extraordinary happened: the Israeli startup ecosystem not only persevered, but it carried on and thrived.
The 2024 annual report by Startup Nation Central and the 2024 Israeli tech review by IVC & Leumitech both draw a positive picture for the Israeli tech ecosystem despite the challenging circumstances:
- Founders continued to build, investors doubled down, and the world took notice. Sequoia, Greylock and others put boots on the ground and committed to investing in Israeli startups.
- The number of new companies has gone down but the quality has generally risen, as I recently commented in my recent interview with Calcaslist. Founders that choose to start companies these days know what they are up against.
- Startups in Israel defied expectations, raising $10.6 billion in funding officially, a 31% increase from 2023 (pre-war). The ‘real’ number estimated to be closer to $12.2 billion due to unreported rounds, as reported by Globes.
- To put this figure in context:
- UK startups raised €16.4B in 2024
- German startups raised $8.2B in 2024, up 4% year on year
- Japanese startups raised $3.7B in VC in 2024.
- Dutch startups raised $2.7B in 2024
- Cybersecurity companies received a significant portion of the global funding, accounting for $3.8 billion or 36% of the total and a 90% year-over-year increase. AI represented 47% of all investments in 2024, which now make up 30% of Israel’s startup ecosystem.
- 2024 also saw a resurgence of mega-funding rounds, with a total of $4 billion raised across various sectors, representing 41% of all capital raised.
- Exits grew by 70% in 2024, reaching $15.8 billion, a record exceeding even the 2021 figures
The number of investments by foreign investors surpassed investments by Israeli investors. The total number of foreign investors also outnumbered the total number of Israeli investors in 2024, but it was slightly down from 2023 (-7%). It didn’t help that flights to Israel in the second half of 2024 have been priced higher due to limited availability.
This growth defied global trends and positioned Israel as the third-highest recipient of startup funding globally, trailing only Silicon Valley, New York and London.
So, what fuelled this resilience?
First and foremost, it’s the indomitable spirit of Israeli entrepreneurs. They are accustomed to operating in a high-pressure environment and are adept at adapting to changing circumstances.
The war also highlighted the critical importance of sectors like cybersecurity and defence tech, areas where Israel has a proven track record of global leadership.
Also, the maturation of the Israeli tech ecosystem played a role. Israel is evolving from startup nation to “scale up nation” with companies demonstrating their ability to grow and compete on a global stage. A lot of second and third time founders are coming back to build companies with global ambitions and they are less interested in selling early.
This, in turn, attracted a surge of investment from both local and international VCs.
Looking ahead to 2025, I see immense opportunity
Investors will focus on high-quality opportunities in sectors with long-term growth potential. Additionally, as regional instability eases, Israel is expected to benefit from increased investments, mirroring trends observed in previous post-tension periods.
Avi Hasson, Startup Nation Central CEO (source)
The challenges of 2024 have forged an even stronger and more resilient ecosystem. I believe the war is imminently over, if the ceasefire holds and all Israeli hostages are returned. Trump’s entry to the White House, along with his cabinet picks and advisors like Elon Musk, David Sacks coupled with increased productivity coming from AI automation tools, might give the tech industry a huge boost over the next year or two.
Early-stage companies, particularly those in artificial intelligence, and those targeting the US market are poised for significant growth. I believe that the US investor community is increasingly recognising the unique value proposition of Israeli tech and founders.
2024 was a testament to the extraordinary resilience of the Israeli startup ecosystem. As we move into 2025, I’m excited to continue investing in this dynamic and innovative market. The future of Israeli tech is bright, and the best is yet to come. I’m excited to continue investing in this vibrant ecosystem and be a part of its continued success story.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
- Investing in resilience: The Israeli startup ecosystem in 2024 - January 15, 2025
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