Mapping Israel's Web3 ecosystem: The startups leading the decentralized revolution
Mapping Israel's Web3 ecosystem: The startups leading the decentralized revolution
“Based on current trends and the momentum in the market, it's expected that over the next 12 to 24 months, at least 20 Israeli Web3 startups will successfully raise Series A and B funding rounds,” said Tomer Niv, crypto and Web3 Investor at Entrée Capital.
The rise of Web3, a new internet paradigm built on blockchain technology and decentralized applications, has been nothing short of explosive. Globally, venture capital investment in this space has reached $100 billion, signaling the immense potential investors see in decentralization. Among the countries making significant strides in this rapidly evolving field, Israel has emerged as a formidable player, leveraging its long-standing leadership in tech innovation.
Israel accounts for approximately $4.5 billion of global Web3 venture capital funding, roughly 4.5% of the total. This statistic underscores the country's disproportionate impact on the industry, driven by a robust ecosystem of over 100 startups spanning 12 sectors, including blockchain infrastructure, cybersecurity, gaming, and decentralized finance (DeFi).
The Israeli Web3 ecosystem is mapped across categories that reflect the wide-reaching applications of decentralized technology. While Israel’s dominance in sectors like Custody & Wallet is evident, the map also highlights emerging stars in areas like real-world assets (RWA) and developer tools. Particularly notable is the capital raised by hardware startups Chain Reaction and Ingonyama, which have secured substantial funding despite being among the few players in Israel’s Web3 hardware space. The Israeli Web3 ecosystem has also seen a number of successful exits, including the likes of GK8, Unbound, Curv, Simplex, First, and Portis.
However, not every sector has seen the same level of growth. The once-booming NFT space, for instance, has deflated, leaving only a few Israeli startups still active in the category. Yet, the real focus for many Israeli Web3 entrepreneurs lies in addressing the global challenges of payments and finance. Israeli startups in the fintech space are working on cross-border payment solutions that can operate at scale—an essential factor in today’s interconnected economy.
Israel’s success in Web3 is not limited to the rise of unicorns like eToro, Fireblocks, and StarkWare. The Israeli Web3 ecosystem is also rich with early-stage startups, with over 80 companies securing seed funding. Companies like Solidus Labs, Chain Reaction, Chaos Labs, Certora, ZenGo, Tres, and Dynamic are at crucial growth stages, leveraging capital to expand their operations, enhance product offerings, and scale their businesses.
“Based on current trends and the momentum in the market, it's expected that over the next 12 to 24 months, at least 20 Israeli Web3 startups will successfully raise Series A and B funding rounds,” said Tomer Niv, crypto and Web3 Investor at Entrée Capital. “Additionally, a significant number of these companies are likely to issue their own tokens as they explore decentralized finance (DeFi) models and other blockchain-based applications.
“As for venture capital funding, if the current rate of growth continues, Israeli Web3 startups could see an increase of several hundred of millions of dollars in VC funding in 2025, driven by both domestic and international investors. This influx of capital will not only fuel the growth of existing startups but also encourage the emergence of new ventures, further solidifying Israel’s reputation as a global hub for innovation in the decentralized world.”
