Israeli high-tech defies odds, raising $9.58 billion in 2024
Israeli high-tech defies odds, raising $9.58 billion in 2024
Despite economic uncertainty and war, tech giants like Wiz and Cyera led record-breaking fundraisings, marking a 38% year-on-year growth.
The year 2024, according to all scenarios, was expected to be a challenging one for Israeli high-tech. However, Israeli high-tech defied expectations, and 2024 is shaping up to be one of its most successful years. According to a LeumiTech and IVC report covering the entire year and the fourth quarter, Israeli high-tech companies raised $9.58 billion across 443 fundraising rounds. This marks a 38% increase in capital raised and a 13% increase in the number of rounds compared to 2023, during which companies raised $6.9 billion. The fourth quarter alone was marked by five significant fundraising rounds, led by Cyera, which raised $300 million, and Armis, which raised $200 million. These rounds contributed $850 million, accounting for approximately 36% of the total amount raised in the quarter.
Maya Eisen-Zafrir, CEO of LeumiTech, commented: "We are seeing companies successfully translating technologies developed or tested during the war into real-world business transactions. Alongside this, innovative work methods that arose from the challenges of the time are giving high-tech an excellent starting point for the coming year. This is reflected in active business activity on the ground. The lowering of interest rates in the US has also provided a boost to Israeli high-tech, which is heavily influenced by macroeconomic conditions. We expect this positive trend to continue into 2025."
Fundraising in the fourth quarter totaled $2.36 billion across 112 fundraising rounds, representing a 4% decrease in capital raised but a slight increase in the number of rounds compared to the third quarter of the year.
The results for 2024 also reflected a shift in the mix of funding sources and types of activity in Israeli high-tech. A significant portion of the capital raised came from mega-rounds exceeding $100 million, including the exceptional fundraisings by Safe Superintelligence, which raised $1 billion in the third quarter, and Wiz, which raised $965 million in the second quarter.
The cyber sector dominated in terms of capital attracted, with cyber companies raising amounts well above the range of recent years (38% of total funds raised). This surge was driven primarily by Wiz's capital raising in the second quarter, but there was also an increase in the overall number of cyber-related fundraising rounds, which rose to 76 after two years of decline. Even when excluding the mega-rounds and cyber fundraisings, a return to growth in 2024 compared to 2023 is evident, both in terms of total capital raised and the number of rounds.
An analysis of this year's fundraising activity by stage reveals that early-stage rounds (Seed and Series A) saw a significant increase after two years of decline. Series B rounds also experienced growth in 2024, following a drop of more than 70% in such rounds between 2021 and 2023.
Despite the ongoing war, Israeli high-tech demonstrated remarkable resilience in 2024. A key factor behind this resilience was investor behavior. Instead of retreating due to uncertainty, investor participation in fundraising rounds actually increased. The number of investors participating in quarterly investments stabilized at levels last seen in 2018-2019. When analyzing the geographical origin of these investors, the participation of Israeli investors continued its downward trend, while the presence of foreign investors stabilized and even grew throughout the year.
