TEL AVIV, Israel, April 2, 2024 – According to new Finder spotlight research by Startup Nation Central, a non-profit that promotes the Israeli innovation ecosystem around the world, in the months following the events of October 7th, the Israeli tech sector remains strong. Despite some immediate challenges to the sector such as a reduction in workforce availability with some 15 percent of the workforce drafted into the war and short-term funding gaps where smaller startups with a short runway were most impacted, the Israeli tech ecosystem is showing characteristic resilience and continues to attract investors and venture capital funds activity.
Private investment rounds: There were 220 private investment rounds announced since October 7th with an estimated $3.1 billion raised. The average investment amount was $19 million. The most notable investment was in Next Insurance which saw two foreign VCs invest $265 million. The leading sectors in the number of rounds were health tech (47), enterprise software solutions (42) and security technologies (39). The leading sectors in the amounts raised were security technology with close to $1.1 billion raised, and fintech and enterprise software solutions with almost $0.5 billion each. Compared to the US the downward trend in investment in Israel is on par with the US.
M&As: The sum of M&As since October 7th is $3.7 billion. There were two very large M&A deals finalized with total acquisition amounts nearing $1 billion. Additionally, nine acquisition deals of over $100 million were finalized, six of which were in the security technology sector, including Talon Cyber Security (acquired for $625 million), Dig Security (acquired for $350 million), Avalor (acquired for $350 million) and Gem (acquired for $350 million). Flow Security and Spera Security were acquired for $200 million and $130 million respectively. Health tech had the third largest deal with CartiHeal acquired for $330 million and accounted for $425 million of total M&A values. Enterprise Software Solutions M&As reached $240 million.
New Funds: Since October 7th, over 20 new funds were established raising a total of $1.7 billion. Of these, 11 funds were established to address urgent startup funding needs due to the impact of the war and to show confidence in the Israeli tech ecosystem. These funds include Iron Nation; 1948 Ventures; OurCrowd – Israel Resilience Fund; SYN Ventures – Cybersecurity Seed; Trendlines – Startup Shield SPV; TechShield; Google Support Fund, and more.
“Israel continues to attract investors looking for solutions to shared global challenges with high potential opportunities. With attractive valuations and significant growth potential, the Israeli tech ecosystem is showing characteristic resilience,” said Startup Nation Central’s CEO Avi Hasson. “I anticipate seeing a new wave of innovation – a ‘startup baby boom’ of tech companies – which will create even more dynamic opportunities for our sector after this war.”
About Startup Nation Central: Startup Nation Central helps global solution seekers tackle complex challenges by giving them frictionless access to the expertise and solutions of Israel’s problem solvers – and their bold and determined approach to innovation. We call this Impatient Innovation. Our free business engagement platform, Finder, grants unrestricted access to real-time, updated information and deep business insights into the Israeli tech ecosystem, explore potential opportunities, and forge valuable business connections.
SOURCE: Start-Up Nation Central (SNC)
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