2025 VC SurveyVC calls for Israel to rethink tax policies to attract foreign investors in 2025
2025 VC Survey
VC calls for Israel to rethink tax policies to attract foreign investors in 2025
“There’s untapped potential with individuals who’ve invested millions in Israeli startups,” says Ben Topor, Founder and Managing Partner of Titan Capital Partners.
“Titan has a global investor base and I can tell you that Israel needs to rethink tax policies to attract foreign investors,” said Ben Topor, Founder and Managing Partner of Titan Capital Partners. “Lower dividend taxes, offer exemptions for single-LP funds for co-investments that can spark the creation of many new funds and managers, as well as build direct relationships with specific investors.”
Topor joined CTech for its 2025 VC Survey where he outlined what the Israeli government can do to help the startup ecosystem as we settle into the new year. “There’s untapped potential with individuals who’ve invested millions in Israeli startups but have never been approached by any government body in Israel,” he added.
You can read more advice and his hopes for 2025 in the interview below.
Fund ID
Name of fund/funds: Titan Capital Partners
Total sum of the fund: $100M AUM
Partners: Ben Topor, Omer Schloss
Notable/select portfolio companies (active): Guesty, WSC Sports, eToro, CTERA, Datarails, BuiltOn, Statement, Soundtrack, Rapid Medical
2024 is over. How would you sum it up for the Israeli high-tech industry?
2024 has been quite a ride for Israeli tech. Unlike other tech hubs we invest in, we've seen in Israel some incredible exits, especially in enterprise software and infrastructure, where Israeli-American VC funds have been a steady force. Meanwhile, sectors like deep tech and consumer-facing industries have faced headwinds. But honestly, that’s where Israeli entrepreneurs thrive—pressure sparks innovation. We’ve seen founders streamline their operations, sharpen their R&D, and get smarter about selling. They’re doing more with less, focusing on the right customers, and leveraging partnerships. When the market bounces back—and it will—these lean, focused companies are set to stand out and prove that tough times build great companies.
Looking ahead to 2025, what challenges and opportunities do you see for the Israeli high-tech sector, and how are you preparing?
2025 feels like a turning point. We’re moving from caution to growth, and that brings huge opportunities. Companies that help customers extract more value from their existing relationships are going to shine. Think about Customer Data Platforms (CDPs) that analyze customer-level data to find upsell opportunities—those are game changers. We’re keeping a close eye on these kinds of solutions because they align perfectly with the value-driven strategies companies are adopting.
How might new American leadership affect the global high-tech landscape, and where does Israel fit in?
The new administration could bring a positive shift. We might see less divisive rhetoric against Israel which results in a more positive mood towards Israeli companies. For Israel, this is an opportunity to step up in areas like cybersecurity, AI, and defensetech. With heightened scrutiny on platforms like TikTok, Israeli expertise in fraud prevention and disinformation security is in high demand. Plus, evolving privacy laws and AI challenges present new opportunities for Israeli companies to innovate. I am hoping that the growing U.S.-Gulf alliances could also open doors for Israeli firms to tap into new markets with cutting-edge solutions.
What are the three most important things the Israeli government can do to boost high-tech next year?
Titan has a global investor base and I can tell you that Israel needs to rethink tax policies to attract foreign investors—lower dividend taxes, offer exemptions for single-LP funds for co-investments that can spark the creation of many new funds and managers, as well as build direct relationships with specific investors. There’s untapped potential with individuals who’ve invested millions in Israeli startups but have never been approached by any government body in Israel. Second, we need more incentives to encourage R&D. Finally, let’s focus on education to ensure the next wave of talent is ready to lead.
What new sectors excite you, and which ones might weaken?
AI-driven solutions are stealing the spotlight, especially in vertical SaaS—software tailored to industries like energy, real estate, and manufacturing. Autonomous agents that automate repetitive tasks are also fascinating. On the flip side, sectors dependent on "super apps" might struggle as companies lean toward specialized tools that deliver superior performance.
Is Israel missing out on the AI revolution, or is it holding its own?
Not at all. Israel’s strength in infrastructure software positions it differently but no less advantageously. AI has mostly been an enhancer rather than a disruptor, and Israel excels at integrating AI into existing platforms. The fusion of AI with defense is particularly promising and could lead to groundbreaking innovations.
Will the global IPO drought end next year?
I believe so. We have in our network some large investors in Wall Street and I can tell you that we've seen some strong software IPOs recently, Reddit for example, and that momentum could encourage more companies to explore public listings. For instance, in our portfolio, eToro is reportedly exploring an IPO, and that’s a good sign for the ecosystem.
Will 2025 be better for early-stage startups or mature companies?
In the short term, early-stage startups have the upper hand. They’re priced attractively and offer higher growth potential in a cautious market. But once the IPO market gains steam, mature companies will likely take the spotlight, offering more predictable paths to liquidity.
Did you raise money in 2024, and what’s your outlook for 2025?
The fund is closed and we are not raising new vehicles. I’m optimistic about 2025—it feels like a rebound year for private equity and VC funding. If IPO markets open up, LPs will have fresh liquidity to reinvest in VC funds.
How did your investments in 2024 compare to previous years?
We made eight investments this year—a 200% increase from 2023. It’s been a busy and rewarding year for us.
Can you share an example of an exciting investment from 2024?
We’re thrilled about Guesty, the largest property management software for short-term rentals. We joined after a growth equity round led by KKR. Guesty is a great example of vertical SaaS, offering a one-stop solution for Airbnb hosts and property owners. They’ve integrated AI to automate operations and fintech solutions for payments, making property management efficient and profitable. It’s exactly the kind of innovation that excites us—focused, scalable, and deeply aligned with industry needs.
Two notable companies that you think will thrive in 2025.
Company Name: eToro
Sector + description of the product/service: Consumer Internet / fintech
Investment amount + total: a few million $ (secondary - confidential). The company has reportedly hired an investment bank to explore an IPO process.
Founding Year: 2007
Reasoning why this is their year: The company stands to gain from anticipated advantages, including relaxed cryptocurrency regulations, lower interest rates, and the reopening of the IPO window, positioning it strongly for a Nasdaq IPO.
Company Name: BuiltOn
Sector + description of the product/service: Construction Software
Investment amount + total: a few million $ (Round B).
Founding Year: 2018
Reasoning why this is their year: The company has recently expanded to the US after a long period whereby they capture a large market share in the Israeli market. After a recent $15M raise led by PSG, we believe the company is well positioned to excel in 2025.
