Despite Israel’s ongoing conflict with the Palestinian militant group Hamas, preliminary statistics revealed on Thursday that Israeli high technology companies obtained $1.5 billion in funding during the fourth quarter of 2023. This indicates that international investors continue to put their money into Israeli entrepreneurs.
In the quarter that ended on December 26, the Israel Venture Capital (IVC) Research Center and LeumiTech reported that funding had decreased by 15% compared to the previous quarter but that 75 acquisitions had been completed. On October 7, the conflict started.
The “seed” financing at the early stage was $220 million for 31 rounds.
According to the research, international involvement increased in the fourth quarter of 2023, following a dip earlier in the year. The report also stated that “the presence of foreign investors is a significant indication of the availability of funds for investments.”
As a gesture of support, seventy CEOs from the United States of America traveled to Israel the week before last.
Mia Eisen-Tzafrir, the Chief Executive Officer of LeumiTech, stated that the figures from the fourth quarter were “an indication of the high durability of the Israeli high-tech industry and an important reminder of the role this sector in the Israeli economy has especially these days.”
Israel’s high-tech sector is responsible for twelve percent of its workforce, more than half of its exports, twenty-five percent of its income taxes, and over a fifth of its economic output.
A minimum of fifteen percent of the workers in the technology sector have been placed on military reserve service.
More than seven billion dollars were raised by Israeli entrepreneurs in 2023, compared to close to sixteen billion dollars in 2022. Most of this funding was obtained in the first part of the year before the global economy slowed down.
Israel’s attempt to modernize its judicial system scared away foreign investors, and it has since abandoned that plan. This was in addition to the fact that financing decreased due to the economy.
The year 2023, according to Eisen-Tzafrir, marked a return to the levels of investment and quantities of activity present in 2018 and 2019, which occurred before the peak years of relative anomalies from 2020 to 2022. In 2021, Israeli technology companies raised $26 billion through 779 funding rounds.
Ben Klein, CEO of IVC, stated that 2023 will be challenging for the Israeli economy and the high-tech sector.
“The results of the entire year, especially the fourth quarter, support an optimistic approach towards the local industry,” stated the president. “Despite the complexity, foreign investors’ participation level is a clear sign of the attractiveness of Israeli high-tech companies, even in difficult times.”
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