2025 VC SurveyNew American leadership presents strategic opportunities for Israeli entrepreneurs
2025 VC Survey
New American leadership presents strategic opportunities for Israeli entrepreneurs
From AI deregulation to “friendshoring,” American policies could deepen collaboration and market access for Israeli startups, says Meron Capital.
“The direction of American leadership in 2025 will have significant ripple effects on the global tech economy, with both opportunities and challenges for Israel and its entrepreneurs,” said Liron Azrielant of Meron Capital, who joined CTech for its 2025 VC Survey.
According to Azrielant, there are three main areas to look out for: Deregulation and Policy Shifts, US-China Decoupling, and Taxes, Tariffs, and Economic Incentives.
“Policies such as corporate tax cuts and R&D tax incentives will make incorporating in the US even more attractive for tech startups,” she continued. “Additionally, increased government procurement opportunities and a push for reduced reliance on foreign suppliers will create advantages for companies with strong local partnerships. The growing trend of ‘friendshoring’ —prioritizing economic partnerships with trusted allies—positions Israel as a key beneficiary, offering Israeli entrepreneurs a chance to deepen collaboration with US companies and expand their market access.”
You can read the entire interview below.
Fund ID
Name of fund/funds: Meron Capital
Total sum of the fund: $100M
Partners: Liron Azrielant, Daniel Roditi and Gil Shai
Notable/select portfolio companies (active): Eon, Quantum Machines, Mesh Payments, Immunai, Apono
Notable exits: Laminar, Testim, Loom Systems, Clear Genetics
2024 is almost over. How can you summarize it in terms of the Israeli high-tech industry?
2024 has been a powerful demonstration of the resilience and adaptability of the Israeli high-tech industry. Despite facing global economic uncertainty, geopolitical tensions, and shifting investor sentiment, the ecosystem has continued to shine through its innovation, agility, and exceptional talent pool.
This year, we’ve observed a heightened emphasis on capital efficiency, sustainable growth, and clear paths to profitability. Startups that successfully adapted to these realities—by streamlining operations, focusing on core value propositions, and exploring creative financing strategies—have emerged stronger and more resilient.
As a result, we’re seeing companies built that are leaner, more focused, and better equipped to navigate uncertainty, positioning them for long-term success in an evolving global landscape.
Looking ahead to 2025 - What challenges and opportunities await the Israeli high-tech sector in the coming year, and how are you, as investors, preparing for them?
Looking ahead to 2025, the Israeli high-tech sector faces both significant challenges and exciting opportunities. On the challenges side, global macroeconomic uncertainty, ongoing geopolitical instability, domestic political and social tensions, and a cautious funding environment are all expected to persist. Startups will need to prioritize capital efficiency, sustainable growth, and clear ROI while navigating an increasingly competitive landscape for both talent and funding.
While seed-stage funding remained strong in 2024, driven largely by foreign investors doubling down on Israel, this has set the stage for an intensely competitive Series A funding environment in 2025. Cybersecurity, in particular, is expected to be fiercely contested, given the concentration of seed funding in that sector. Founders who raised capital in 2024 will need to deliver exceptional performance and clear differentiation to secure follow-on funding.
Yet, amid these challenges, we see a new generation of founders emerging—individuals who are more creative, more agile, and deeply driven to succeed. Shaped by recent adversity, this cohort is entering 2025 with sharper skills, greater resilience, and a clearer understanding of what it takes to build sustainable, high-impact companies.
At Meron Capital, we’re excited to continue backing these exceptional founders, supporting them as they navigate the evolving landscape and turn today’s challenges into tomorrow’s successes.
How will new American leadership affect the global high-tech industry or economy? And where does this place Israel and its entrepreneurs?
The direction of American leadership in 2025 will have significant ripple effects on the global tech economy, with both opportunities and challenges for Israel and its entrepreneurs. Key areas to watch include:
- Deregulation and Policy Shifts:
A push towards deregulation could benefit sectors like crypto, fintech, medtech, defense tech, and AI by reducing bureaucratic hurdles and fostering innovation. A more lenient antitrust approach may accelerate large M&A deals, but could also incentivize startups to stay private longer, aiming for higher acquisition valuations while reducing IPO activity. In crypto, lighter regulatory oversight might drive technological advancements but also pose risks—potentially weakening the dollar and enabling illicit financial activities. This will create demand for guardrails and monitoring tools to ensure responsible adoption.
- US-China Decoupling:
The ongoing economic and technological decoupling from China will continue to reshape industries, particularly semiconductors. This shift will drive increased investment in domestic and Western manufacturing capabilities and significantly boost demand for cybersecurity solutions to protect sensitive technologies and infrastructure.
- Taxes, Tariffs, and Economic Incentives:
Policies such as corporate tax cuts and R&D tax incentives will make incorporating in the US even more attractive for tech startups. Additionally, increased government procurement opportunities and a push for reduced reliance on foreign suppliers will create advantages for companies with strong local partnerships. The growing trend of "friendshoring"—prioritizing economic partnerships with trusted allies—positions Israel as a key beneficiary, offering Israeli entrepreneurs a chance to deepen collaboration with US companies and expand their market access.
For Israeli entrepreneurs, these dynamics represent both strategic opportunities and operational challenges. Startups will need to navigate regulatory landscapes carefully, align their strategies with shifting geopolitical priorities, and build solutions that address emerging risks—particularly in AI governance, cybersecurity, and fintech compliance. Israel’s strong foundation in innovation, combined with its trusted partnership with the US, will ensure it remains well-positioned to thrive in this evolving environment.
What are the three most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
- Strengthen Deep-Tech Infrastructure and Ecosystem:
Investing in state-of-the-art research labs, fostering stronger collaboration between academia and entrepreneurs, and supporting commercialization pathways for scientific breakthroughs will create fertile ground for deep-tech innovation. This includes sectors like semiconductors, quantum computing, and biotech, where Israel can build long-term strategic advantages. Deep-tech development is more long-term in nature, and therefore could only flourish if supported by a long-term viewing entity - like the government.
- Position Israel as an AI Infrastructure Leader:
The government should increase grants and incentives to encourage both foundational and applied AI research while investing in AI-specific infrastructure—including advanced computing resources and data frameworks. Establishing Israel as a global AI innovation hub will attract top-tier talent, foreign investment, and multinational collaborations.
- Advance Energy Independence Through Grants and Infrastructure:
Supporting renewable energy infrastructure projects and offering grants for clean energy technologies will reduce Israel's reliance on external energy sources. Prioritizing advancements in solar energy, energy storage solutions, and smart grid technologies will not only enhance national resilience but also create opportunities for Israel to become a global leader in sustainable energy innovation.
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
The most relevant sector in Israel at the moment is defensetech, the war impacts every Israeli. We witness very strong founders starting defense tech companies which brings in lots of interest from global tier 1 VCs and local VCs with key persons specializing in this sector. This sector, while promising, has two major challenges. The first is the complexity of selling to the DoD (which is sometimes underestimated by Israeli entrepreneurs), and the second is that startups in this domain have virtually zero exit opportunities. Defensetech startups must therefore either build a company over decades and IPO, or there are only two real potential buyers - Anduril and Helsing - and they can’t buy everybody
In addition, we expect climatetech to strengthen in relevance in 2025. Over the past few years, we've seen the sector mature significantly, with stronger, more experienced founders entering the space, driven by both global urgency and local innovation capabilities. Israel's strengths in deep-tech, AI, and water technologies position it uniquely to tackle global climate challenges, from renewable energy and carbon capture to sustainable agriculture and resource management. While some sectors may face headwinds due to market saturation or shifting investor priorities, climatetech is on the rise, and we expect it to attract increased investment, more creative solutions, and companies and deliver meaningful impact in the coming years.
Is Israel missing out on the AI revolution in the global arms race? If not, what should the local industry focus on to join the global race?
While Israel is uniquely positioned to be a global AI leader—thanks to its deep expertise in cybersecurity, defense technology, and data-driven innovation—it has not yet fully capitalized on this potential. Unlike its well-established dominance in cybersecurity, Israel has yet to produce a critical mass of globally significant AI-native startups. Many top founders still direct their focus toward cybersecurity and IT, and an “AI playbook” tailored to Israeli startups remains underdeveloped.
For Israel to fully seize the opportunities of the AI revolution, more talent and investment capital need to flow into AI-focused ventures. While foundational AI models (e.g., LLMs) are largely dominated by global tech giants, Israel can establish leadership in enabling technologies—such as model optimization tools, deployment infrastructure, and AI cybersecurity solutions.
At the application layer, there’s growing demand for tools that enable Generative AI adoption in regulated industries like healthcare, legal tech, construction, and government services. These domains present fertile ground for Israeli founders to build high-value, defensible businesses.
As investors, we recognize that the AI revolution has significantly lowered barriers to entry across many domains. Today, building tools that leverage AI to perform various tasks has become relatively straightforward. This shift makes it challenging for startups focused solely on AI applications to establish a lasting competitive advantage. However, in regulated industries, the real value lies in the unique frameworks and “wrappers” that startups build to enable AI adoption while navigating compliance, security, and operational constraints. These tailored solutions can become a sustainable competitive advantage in their own right.
Could the global IPO drought end in the coming year?
Yes, with the decrease in interest rates in the US we believe that the market will respond positively and the companies that were waiting for the right moment will pull the trigger.
From an investor's perspective: will the coming year be better for early-stage startups or more mature companies?
Good founders kept raising money also in 2023 and 2024 and they will keep doing so in 2025, perhaps in higher volumes. As for more mature companies, we believe that we will see more mega funding rounds, high volume of M&A transactions, and IPO as companies are waiting for the right time and terms will mature. Therefore, the more mature companies will have a major spotlight on them.
Did you raise fund money in 2024 for an existing fund or a new one? What are your expectations regarding this matter for 2025?
We started fundraising for our Fund III at the end of 2024 and received outstanding feedback and support from our partners and investors. We are excited about closing our third fund in 2025.
How many investments did you make in 2024, and how does it compare to previous years?
Two investments - Eon and Limitless CNC. This is a pace that is slightly below average for us. In 2023 we made three investments - Hopper, Nokod, and Vocai.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
Limitless CNC - Revolutionizing CNC Programming with AI. Limitless has an outstanding team with a great vision in a market thirsty for innovation and disruption. They bring AI to industrial tech and getting great feedback and traction. They are solving a critical problem with great market need and tapping into a massive market opportunity as OEM manufacturers in aerospace, automotive, and industrial sectors need scalable solutions to cut programming time and boost machine utilization.
Western manufacturing is resurging for high-end precision parts, driving demand for innovation in production and they are bringing a critical efficiency improvement into this manufacturing process.
Limitless is pioneering AI capabilities that understands 3D part engineering and physical aspects, delivering real-time, interactive CAM programming. It is exclusively trained on client data, ensuring secure, tailored solutions that surpass static automation tools.
Two notable companies that you think will thrive in 2025. These can be from your portfolio or not.
Company Name: Eon
Sector + description of the product/service: IT. Cloud infrastructure has become the standard for hosting customer applications, utilizing diverse cloud services, such as cloud virtual machines with block storage, object storage, elastic file systems, databases, data lakes and data warehouses. The cloud’s scale and dynamic nature make it increasingly challenging to continuously map, classify, and group ever-changing resources, to back them up per business and compliance requirements. Traditional backup methods fall short, unaware of data context, rely on manual, error-prone resource tagging, and use costly general-purpose snapshots that do not allow finding and restoring specific files or database records when required. There has to be a better way.
Investment amount + total: Meron Capital: $2.2M, total: $200M
Founding Year: 2024
Reasoning why this is their year: Eon has been the fastest-growing company in Israel in recent years. From the speed at which it raised $200M (2X faster than Wiz) to the speed at which they hire top talent or add F500 clients to their pipeline, there isn’t another company in Israel that is moving this fast or delivering this well.
Company Name: Quantum Machines
Sector + description of the product/service: Quantum Computing. Quantum Machines is developing the world’s most advanced quantum computing cloud infrastructure to bring about the biggest computing revolution since the invention of computers.
Investment amount + total: Meron Capital: $2M, total: $90M
Founding Year: 2018
Reasoning why this is their year: The area of Quantum Computing is exploding and Quantum Machines are the leading company in this domain. With dozens of tier 1 clients, partnership with Nvidia to get closer to an error-corrected quantum computer, and Successfully established and launched the official Israeli Quantum Computing Center. QM is one of the most interesting companies in Quantum Computing, and in Israel in general.
