The downtrend in venture capital (VC) fundraising for Israel Startup Nation continues, reaching its lowest point in a decade, with just $1.15 billion raised across 21 funds in 2024. According to the latest IVC – GNY – KPMG Investors Report, the Israeli tech ecosystem is experiencing a significant slowdown in capital flow, affecting startups and investment activity.
The report provides an in-depth analysis of fundraising and investment trends by Israeli VC funds, the availability of Dry Powder (capital for local tech ventures), and the involvement of foreign VC funds, corporate VC investors, and Israeli institutional investors.
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Key findings include:
✔ 1,868 VC-backed investments in Israeli tech companies in 2024
✔ 863 VC funds investing in Israeli startups
✔ 138 corporate VC funds active in the Israeli market
✔ 347 investments by Israeli institutional investors (2020-2024)
With VC fundraising at its lowest in a decade, the Israeli tech sector faces challenges in securing capital for innovation and growth. The report highlights the shifting investment landscape and the implications for startups, investors, and corporate venture arms looking to navigate the evolving market.
According to the report, across nine years, Israeli VC funds have had nearly $11.8 billion in cumulative total “dry powder.” Approximately $3.5b is available for new portfolio companies (first investments), and $8.3b is reserved for existing portfolio companies (follow-on investments). In 2024, the available capital was lower compared to 2023 and totaled $922m ($415 for new investments and $504 allocated to portfolio companies).
The Israeli VC fundraising downtrend continued in 2024, reaching the lowest in a decade, totaling $1.15b raised by 21 funds compared to approximately $2b in 32 funds in 2023. Five funds raised over $100m each, compared to nine in 2023.
“VC fundraising kept dropping in 2024 following a weak year in 2023,” said Ben Klein, IVC CEO. “It reached the lowest point in fundraising for new Israeli VCs since 2015. However, according to IVC data, we can expect a change in sentiment in 2025, as many funds are in the process of fundraising.”
Cyber and GenAI were the tech verticals Israeli VCs preferred for new investments the most. The number of new investments in Fintech and Foodtech companies dropped to the lowest since 2018. Notably, nine Deeptech companies attracted over $100m each from Israeli VCs.
In 2024, Israeli VCs increased their new investments in life sciences companies compared to 2023.
“Though investments in Cyber Security and Generative AI are similar in number and volume in 2023 and 2024, mega investments in a few companies in these sectors have slanted total investment volumes upward,” said Dina Pasca Raz, Partner and Head of Technology, KPMG Israel. “Excluding these mega-rounds, total investments reflect the trends and challenges Israel and the tech sector faced in the last tough year. Looking forward, we see the first signs of a positive turn and expect this trend to continue in the year ahead.”
According to the report, Israeli institutions invested $83m in 29 deals compared to $187m in 44 deals in 2023.
First Investments by foreign CVCs declined in 2024 to 73 deals, the lowest in a decade. Israeli CVCs made 10 new investments, slightly higher compared to 2023.
According to the investment figures, VC funds have maintained their first investment activity similar to 2023. IVC estimates that 2024’s first investment figures will significantly grow compared to the previous years for both Israeli and foreign VCs.
KPMG Israel, a leading accounting and business consulting firm with over 1,600 experts, blends local insights with global trends. The firm offers advanced audit, tax, and advisory services, driving growth and strategic success in Israel’s dynamic economy through innovation.
Founded in 1997, IVC Research Center is the leading data source and business information company in Israel’s high-tech industry.
