Israel's tech industry managed to rise above the war and recorded its highest quarterly fundraising in two years. According to a preliminary Q2 2024 report by LeumiTech and IVC, funding in Q2 reached $2.9 billion across 110 funding rounds. Around 62% of the capital raised in the quarter came from six funding rounds, most of which were from cyber sector companies such as Wiz, Semperis, Island and Cyera. The most notable deal was by Wiz, which completed the largest funding round in Israeli tech history, raising $1 billion at a valuation of over $12 billion.
The positive upward trend that began in the first quarter is evident even excluding Wiz's huge fundraising, with funding ($1.93 billion) increasing by about 19%.
Israeli startups raised $1.7 billion in the first quarter of this year, and $1.9 billion, $1.7 billion and $1.4 billion in the fourth, third and second quarters of 2023, respectively.
The number of funding rounds in Q2 was roughly the same as the previous quarter, marking a change in the downward trend since the beginning of 2022. On an annualized basis, the current quarter marked the first time since Q1 2022 that funding volume was as high as Q2 2023 (excluding the Wiz deal).
The number of investments by foreign investors (companies not headquartered in Israel) has increased slightly over the past six months after a dip in the fourth quarter of 2023. This positive trend continues despite the presence of Israeli investors.
Maya Eisen Zafrir, CEO of Leumitech, said: “If this volume of activity continues, the tech sector will end the year with growth compared to last year. Moreover, it is encouraging to see that a thorough investigation into the investors' identities shows that the deal involves foreign investors who have never invested in Israel since the war began.”
IVC CEO Ben Klein added: “The second quarter ended with positive growth indicators. Activity in Israel's hi-tech industry continued to grow modestly, which is noteworthy given the circumstances. The growing presence of foreign investors demonstrates the attractiveness of Israel's hi-tech industry.”
