Investment in Israeli startups and tech firms spiked sharply toward the end of the year, fueled by major funding injections into cyber and AI startups, according to a report published Monday, marking the strongest quarterly results for Israeli tech since the first three months of 2022.
Preliminary data compiled by research center IVC and LeumiTech, a Bank Leumi arm that specializes in tech companies, showed that Israeli tech startups raised $3.43 billion in capital from investors from October through mid-December across 94 funding rounds.
The investment totals were 45 percent higher than those over the previous three months, when the war in Gaza was still in full swing, dampening investors’ appetite to sink money into Israel-based firms.
A US-brokered ceasefire entered into effect in Gaza on October 10, halting two years of war that began with a devastating Hamas-led attack on Israel two years earlier.
The volume of capital raised in the last quarter of the year was up 37 percent from the fourth quarter of 2024, a period that saw Israel at war with Hamas in Gaza and embroiled in intense fighting against the Hezbollah terror group in Lebanon and in heightened hostilities with Iran.
Sign up for the Tech Israel Daily
and never miss Israel’s top tech stories
By signing up, you agree to the terms
“The past year reflects the strength and continued growth of Israeli tech, despite a prolonged period of uncertainty and upheaval in the local and global arena,” said LeumiTech CEO Maya Eisen-Zafrir.
Visitors at Hostage Square in Tel Aviv, November 24, 2025 (Miriam Alster/Flash90)
Funding difficulties hampering the local tech industry due to the fighting on multiple fronts started to recede in late 2024, with the sector’s recovery gaining steam this year.
A separate report by Startup Nation Central found that Israeli tech startups and firms raised $15.6 billion in private capital from investors this year through December 17, a 24% increase compared to 2024 and a 68% leap compared to 2023.
After two volatile war years, Israeli tech funding rebounded in 2025, “marked by a sharp return of capital, alongside a fundamental shift in how and where that capital is deployed,” read the preliminary annual report from Startup Nation Central, which tracks the local tech ecosystem.
IVC and LeumiTech, which do not include funding rounds that have not yet been fully published and those of newly founded startups, reported slightly lower numbers of $11.1 billion across 418 funding deals, still a 15% increase in capital compared to 2024.
Both reports noted that investors closed fewer deals, but committed significantly more capital to each one.
Illustrative: A tech development center in Herzliya, Oct 30, 2020. (Gili Yaari/Flash90)
According to Startup Nation Central, deal volume in 2025 declined to 717 founding rounds, the lowest in the last decade. Yet, the median funding deal size reached a record $10 million, up 67% year over year, and the highest since 2019.
“We are seeing a growing gap between public sentiment and corporate behavior,” said Yariv Lotan, VP of Product and Data at Startup Nation Central. “While early-stage founders face tougher funding conditions, global corporations are moving decisively in the opposite direction.”
The IVC report noted several larger deals that led capital-raising rounds over the past three months, with four transactions above $200 million.
In November, Israeli-founded cybersecurity unicorn Armis Security nabbed $435 million in fresh capital from investors and is reportedly in advanced talks to be acquired by US software company ServiceNow Inc. in a deal that could be worth up to $7 billion.
Israeli-founded Cyera, a developer of an AI-powered data security platform, is raising $400 million in a funding round led by New York-based alternative asset manager Blackstone that values the company at $9 billion, according to reports this month.
Over the course of 2025, investments in cyber and AI-related companies accounted for 70% of the total capital raised, according to data presented in the IVC report.
Startup founders, global investors and military officials gather at the second annual DefenseTech Summit at Tel Aviv University, December 2, 2025. (Stav Levaton/Times of Israel)
LeumiTech’s Eisen-Zafrir noted that “the capabilities and reputation that were built up in recent decades in the field of cyber, together with the leadership we see in the field of AI, constitute a force multiplier and a strategic asset for Israel.”
“The AI revolution is not only driving the market but is also creating new needs in the fields of information protection and privacy,” Eisen-Zafrir added.
International investors maintained their dominant role in the Israeli tech ecosystem in 2025, accounting for 60% of total number of investors, according to data compiled by Startup Nation Central.
“2025 was not about a return to business as usual; it was a pivot toward high-conviction maturity,” said Startup Nation Central CEO Avi Hasson. “Israel isn’t just a source of innovation, it is the global anchor for critical technologies like AI and cybersecurity.”
Is The Times of Israel important to you?
If so, we have a year-end request.
Every day during the past two years of war and rising global antisemitism, our journalists kept you abreast of the most important developments that merit your attention. Millions of people rely on ToI for fact-based coverage of Israel and the Jewish world.
We care about Israel – and we know you do too. So as 2025 draws to a close, we have an ask: show your appreciation for our work by joining The Times of Israel Community, an exclusive group for readers like you who appreciate and financially support our work.
Already a member? Sign in to stop seeing this
You appreciate our journalism
You clearly find our careful reporting valuable, in a time when facts are often distorted and news coverage often lacks context.
Your support is essential to continue our work. We want to continue delivering the professional journalism you value, even as the demands on our newsroom have grown dramatically since October 7.
So today, please consider joining our reader support group, The Times of Israel Community. For as little as $6 a month you’ll become our partners while enjoying The Times of Israel AD-FREE, as well as accessing exclusive content available only to Times of Israel Community members.
Thank you,
David Horovitz, Founding Editor of The Times of Israel