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    Tuesday, April 2, 2024

    Israeli Startups Raised $3.1 Billion Since War Began on Oct 7

    Israel high-tech startups are still raising funds despite the country’s war with Palestinian Islamist group Hamas, although at a slightly slower pace, Startup Nation Central (SNC) said in a report.

    Since the start of the war, sparked by Hamas’ shock attack on Israel on Oct 7, there have been 220 private investment rounds with US$3.1 billion raised, the non-profit organisation reported, with security technology firms accounting for one-third of funds raised.

    Next Insurance raised the highest amount for a single company with US$265 million from two foreign venture capital funds.

    In the prior six months – the second and third quarters of 2023 – fundraising was US$4.3 billion in 330 rounds.

    SNC said the Israeli tech sector remained strong despite challenges such as a reduced workforce, as some 15 per cent of tech workers were drafted into military reserve duty, and with funding gaps for smaller startups.

    “With attractive valuations and significant growth potential, the Israeli tech ecosystem is showing characteristic resilience,” said SNC CEO Avi Hasson in a statement.

    He predicted a new wave of innovation and opportunities for the sector after the war.

    Mergers and acquisitions activity since Oct 7 has also been robust, totalling US$3.7 billion, with two deals comprising nearly US$1 billion and nine others above US$100 million, SNC said.

    Among them were Talon Cyber Security, which was bought by Palo Alto Networks for US$625 million in November 2023. Palo Alto also acquired Dig Security for US$350 million a month earlier.

    In the second and third quarters, M&A activity totalled US$1.4 billion.

    The high-tech sector drives Israel’s economy and accounts for 16 per cent of employment, more than half of Israel’s exports, a third of income taxes and nearly a fifth of its overall economic output, according to Bank of Israel data. Reuters

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