Great optimism about the way forward for Israeli high-tech – alongside main international and home challenges – was the image offered by Dror Bin, CEO of the Israel Innovation Authority, in his handle to the thirty second Globes Israel Business Conference final week.
Bin reviewed the foremost crises that the native business has confronted over time – from the dot-com bubble of the early 2000s, to the 2008 monetary disaster, Covid-19, and up to date safety crises. “The widespread denominator is that after each disaster, Israeli high-tech broke boundaries and grew.”
He described the important thing query now going through Israel’s financial system: whether or not comparable progress might be anticipated following the challenges of the final two years of warfare, and certainly the final 5 years, which he described as “very difficult.”
“Israeli high-tech is in the end a product of world high-tech,” Bin mentioned. “Most buyers listed here are overseas, most prospects are multinational giants, mergers and acquisitions occur by firms overseas that purchase startups right here, and IPOs of Israeli firms happen abroad.”
Global challenges resulting from funding local weather shifts
Bin mentioned the worldwide funding local weather had modified dramatically for the reason that warfare in Ukraine, together with rising inflation, and better rates of interest. “In 2021 there was loopy hyper-growth in high-tech funding – right here as nicely – after which a crash the world over and in Israel. Now we’re additionally speaking about boycotts and buyers who say they don’t need to put money into Israel – all of that is actual.”
Another main shift, he famous, issues the areas the place high-tech funding is concentrated. “We’ve simply come out of fifteen years of huge innovation within the digital world and cyber, pushed by the necessity to shield digital property. Recently there was much less innovation in these areas and extra innovation in real-world domains that require deep applied sciences akin to protection tech, food-tech, and health-tech.”
Bin additionally pointed to the dramatic transfer made by the Biden administration in 2022, channeling tons of of billions of {dollars} into expertise and infrastructure as a part of the US-China international race.
These international challenges converged with Israel’s wartime challenges over the previous two years. Bin described the extreme situations confronted by high-tech firms, together with the truth that in some companies 20% of staff had been referred to as up for reserve obligation. Many firms had been unable to ship staff overseas or host guests in the course of the time of warfare.
Bin offered an optimistic outlook on this matter. “Two years later, Israeli high-tech has demonstrated extraordinary resilience. 2025 is already one of the best 12 months ever for exits – Israeli firms have been acquired for $71 billion. The earlier file was 2017, when exits totaled $22 billion.”
He additionally reported encouraging knowledge displaying that Israel is the fifth-largest hub on the earth when it comes to complete capital raised by startups, and that high-tech now accounts for 57% of Israel’s complete exports.
Decline in new Israeli startups
Alongside the excellent news, Bin highlighted worrying indicators – together with a drop within the variety of new startups based in Israel, and a pointy drop in capital raised by enterprise capital funds. In 2024, VC funds raised solely $1.3 billion, in contrast with $6.1 billion in 2022. He additionally warned in regards to the over-concentration of funding in cybersecurity and enterprise software program. “We need to see a way more various high-tech sector,” he mentioned.
Looking forward, Bin named a number of encouraging components. Chief amongst them is a big discount in safety and geopolitical danger. “The threats from Hamas, Iran, Syria, and Hezbollah have declined and our scenario has vastly improved.”
He added that in the course of the warfare, Israel delivered a “mind-blowing technological demonstration” of its capabilities – together with Iron Dome, AI-driven warfare, drones, “and plenty of applied sciences that the world is now seeing and marveling at what Israeli is doing. Companies need to be right here and be half of what’s occurring.”
Another supply of optimism, he mentioned, is “Vibrant entrepreneurial exercise.” According to the Innovation Authority, even within the midst of the warfare there was a 60% surge in functions from entrepreneurs looking for funding. Bin attributed this bounce to individuals being pushed out of their consolation zones and encountering new wants and alternatives. “I hope it will mature into many new startups the day after.”
“Israel is world’s #2 in deep-tech fundraising”
Bin expects that the startups rising after the warfare shall be completely different – centered on fixing “tangible real-world issues, not simply digital ones.” In current weeks, he famous, “We have been seeing robust revival each in startup exercise and in enterprise capital. Maybe issues are revving up. Time will inform.”
Regarding the quickly rising deep-tech sector, Bin mentioned Israel had at all times been a powerhouse. “About 1,500 firms in Israel are categorized as deep-tech – roughly 20% of all tech firms within the nation. These firms have raised $28.6 billion, a few third of complete high-tech funding. Israel ranks second on the earth after the US in deep-tech fundraising.”
Following the beginning of the warfare, the Innovation Authority launched the Deep-Tech Venture Capital Funds Incentive, geared toward creating “one of the best funding surroundings on the earth for ventures on this sector,” Bin mentioned. “I assure that is one of the best authorities deep-tech fund anyplace.”
On the “red-hot” space of synthetic intelligence, he mentioned, “AI goes to alter every little thing we all know throughout all areas of life and all high-tech sectors. Contrary to the prevalent narrative, Israeli high-tech is in a powerful place globally. We are fourth on the earth within the variety of AI startups, and fifth in complete AI funding. Israel should proceed investing. We’ve solely simply begun.” In this regard, he famous the brand new nationwide AI taskforce now being superior by the Prime Minister’s Office, and the NIS 1 billion funding in AI made by the Innovation Authority lately.
Another revolution, no much less vital than AI, Bin mentioned, is artificial biology, which is “altering present types of life for the higher, or creating new types of life. We’re about to see a rare breakthrough, very related for many who have a level in biology.” He talked about a current Israeli achievement involving the profitable implantation of a 3D-printed synthetic eye in a human physique.
“The function of the Innovation Authority is to create the optimum surroundings to maximise potential,” Bin concluded. He pointed to the Authority’s funds supporting incubators, funding funds, and institutional funding in deep-tech, in addition to the tax reform introduced by the Innovation Authority, the Tax Authority, and the Ministry of Finance granting tax breaks to incentivize Israeli high-tech.
He emphasised that the reform “impacts all stakeholders – Israeli and overseas buyers, progress firms, and Israelis who need to return dwelling. The objective is to make sure that Israeli high-tech fires on all cylinders to drive the complete Israeli financial system ahead.”
Published by Globes, Israel enterprise information – en.globes.co.il – on December 3, 2025.
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