The IVC-LeumiTech Israeli Tech Review Q3/2024 full report will be published in October, but the preliminary numbers released today provide a reason for optimism, which is pretty remarkable, given the war.
Israeli startups raised $2.43 billion in the third quarter of 2024, across 99 rounds, representing a 32% increase compared to the same period in 2023 (pre war). Excluding the large transactions (6 transactions of over $100 million), the investments in the third quarter amounted to $1.33, a 5% increase compared to the previous quarter.
Despite the growth, Q3 2024 saw a 20% decrease in funding and a 17% drop in deal volume compared to Q2 2024, highlighting volatility.
In contrast to the dominance of the cyber sector in the previous quarter (62% of the total capital raised), in the third quarter the scope
The transactions amounted to about 14% of the total of all rounds. SSI Inc. $1 billion round accounted for 41% of total Q3 investments.
Foreign investor participation remained strong, while local investor activity declined due to geopolitical and economic uncertainties. Despite the war, in the last nine months Sequoia , Greylock and Accel all opened offices in Israel, and Founders Fund appointed a partner to cover Israeli deals.
Another strong indicator has been exits/ liquidity. In the last 30 days Salesforce acquired three Israeli startups for a combined $2.6 billion, Israeli gaming startup Superplay was acquired by Playtika for $700M in cash (and up to $1.9 billion in earn out targets) and Wiz, Israel’s fast growing cybersecurity startup is talks on raising funding at $20 billion valuation, after turning down a Google acquisition offer for $23 billion. Not bad, considering the headlines you read about Israel daily.
The report published by Startup Nation Central earlier this month showcases this in more detail:
Israel continues to draw investors seeking bold, determined solutions to global challenges. With attractive valuations and immense growth potential, the Israeli tech ecosystem remains resilient—no matter the circumstances.
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– Startup Nation Central: One Year of Israeli Innovation in War
2024 has been a very hard year, filled with loss and anxiety. Most Israelis (and Jews around the world) are dealing with the aftermath of what’s been the largest massacre of Jews since the Holocaust and the many losses that followed in the battlefield. It will take time to heal these wounds. But overall, these early signs of recovery make me optimistic about the future of Israeli tech.
While the number of companies being founded has gone down, the quality has gone up. While the credit rating for Israel has gone down, the foreign investor interest remained high. And if you follow history, the best companies have been built after a crisis. There are still huge challenges ahead, but we must continue to build, now with a stronger sense of purpose than ever before. As we’re approaching the Jewish New Year, I’ll take the opportunity to wish a Shana tova and Chatima Tova to all those celebrating.
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.
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