"Good companies will always find ways to raise money"
"Good companies will always find ways to raise money"
Maor Fridman of F2 Venture Capital was speaking at the Calcalist and Bank Hapoalim RoadShow+ event. Dr. Adi Hoorvitch-Lavi, VP of Investments and Growth at Poalim Tech: "The level of fundraising has stabilized, foreign investors believe in Israel and are opening offices here."
Israel’s high-tech sector is navigating a year marked by economic challenges, geopolitical instability, and shifting investor sentiment. Despite these hurdles, local entrepreneurs and investors are finding new opportunities, particularly in fields like defense tech and AI. As the industry faces increased pressure to deliver results, leaders like Adi Hoorvitch-Lavi of Poalim Tech, Rotem Eldar of 10D, and Maor Fridman of F2 Venture Capital are focused on resilience, innovation, and strategic growth. These discussions were explored in a recent conversation at the Calcalist and Bank Hapoalim Roadshow+ event.
1 View gallery
From left: Maor Fridman, Rotem Eldar, and Dr, Adi Hoorvitch-Lavi, speak to CTech editor Elihay Vidal at Roadshow+
(Photo: Oz Meulam)
How would you summarize 2024, especially regarding startups and investments?
Hoorvitch-Lavi: "We see that the level of fundraising has stabilized. In the pre-seed and seed stages, we are seeing good rounds, but when companies need to raise a Series A or higher, there are more challenges. However, we also see strong exits, and foreign investors still believe in Israel and are opening offices here. All of this is made possible by the unique qualities of Israeli entrepreneurs—leadership and self-sufficiency. These are the key factors driving the Israeli 'magic'—the ability to endure and continue to raise funds, make sales abroad, and exit successfully."
Fridman: "2024 is definitely the year of AI, both globally and locally. Our investments in AI have increased this year. But we’ve also seen a unique phenomenon—the war, with founders and employees called to serve in reserves. Despite these challenges, the industry has shown incredible resilience."
Eldar: "There’s a growing trend toward commoditization of software companies, while deep-tech is on the rise. AI is consuming software, and companies need to make greater efforts to stay competitive in the market."
What does 2025 look like, especially in Israel?
Hoorvitch-Lavi: "We’re quite optimistic about 2025. I hope recruitment levels will increase. In addition to AI and cybersecurity, there’s growing focus on defense tech due to the war. Every fund is bringing on a partner for defense. It’s great to see that venture capital funds are now entering the defense tech space, and we expect to see familiar trends alongside this new sector."
Eldar: "This trend started in the U.S. around six or seven years ago. We’ve seen private hands taking over the space industry, which led to lowered launch costs and an increase in innovation. I believe defense is undergoing a similar transformation, especially with rising global instability. Military technologies and threats are becoming increasingly technological. The military needs to respond at the pace of startups, as countries remain their main customers. We’re seeing a significant increase in defense budgets, and we expect that to continue."
How is the conflict impacting the defense sector?
Eldar: "There’s an obvious impact, with tensions rising not only locally but between the U.S. and the East as well. This has increased global instability, and budgets are flowing accordingly. The defense industry now faces unique challenges, including growing concerns about buying military technologies from foreign state entities. Israeli startups often face localism and wariness when attempting to sell to international markets. My advice to startups is to think globally, ensuring that their products are not merely serving local operational needs but have the potential to lead the world."
Hoorvitch-Lavi: "Stage A companies often struggle to meet their promises and successfully scale. This challenge will likely persist in 2025. For startups that have raised their Seed rounds, transitioning to a Series A is still a significant hurdle. That’s why we’re here—to help companies bridge that gap."
What challenges do startups face moving forward?
Eldar: "Startups today face significant hurdles in reaching the level required to secure follow-on rounds. Expectations are higher, with a focus on stronger KPIs. This creates a dual challenge: startups need to evaluate their runway to raise their next round, and they need to do so with less money. My advice is always to raise more than you need and reduce your burn rate. With AI, startups can achieve much more with smaller teams and fewer resources."
Fridman: "Good companies will always find ways to raise money. The key is sustainability and adaptability."
Hoorvitch-Lavi: "The challenges are twofold: sometimes startups face difficulty raising money, and other times the issue is knowledge. At Poalim Tech, we’ve developed programs that help entrepreneurs bridge the gap between fundraising rounds. We also offer programs designed for growth companies, making knowledge more accessible and helping them prepare for an IPO. The market is always changing, and startups need to stay adaptable."
