2025 VC SurveyIsrael will "experience a 'baby boom' of innovation" in 2025, says RUNI Ventures
2025 VC Survey
Israel will "experience a 'baby boom' of innovation" in 2025, says RUNI Ventures
Founder and Managing Partner Hila Rom made the remarks for CTech’s 2025 VC Survey.
“2025 is expected to be a year in which the technological ecosystem in Israel experiences a 'baby boom' of innovation," said Hila Rom, Founder and Managing Partner at RUNI Ventures. "Naturally, we anticipate a massive spike in defensetech, with many new developments emerging directly from the battlefield and new funds established to capitalize on these opportunities."
As we enter 2025, many VCs are bullish on AI and how it will transform almost all areas of our lives. At RUNI Ventures, a pre-seed VC affiliated with Reichman University, the team invests the first check in founders building tech companies across various sectors with a focus on Enterprise Software, Data, and AI.
“The cyber sector, which accounted for 40% of total investments in Israel this year, is expected to continue leading and growing stronger,” Rom continued. In addition to defense and cyber, I think that Israel is well-positioned to lead in other areas where it offers a strong competitive advantage and deep domain expertise, such as Health Tech, AgriFood Tech, and more.”
You can catch the whole interview below.
Fund ID
Name of the fund: RUNI Ventures
Total assets: $20m
Managing Partner: Hila Rom
Latest investments in Israel: 12/24
Selected portfolio companies: JourneyZ, Canotera, Sequent, imgn.ai, Claro.AI, Relyon.AI, Shopeaks
2024 is almost over. How can you summarize it in terms of the Israeli high-tech industry?
The past year presented Israel's high-tech industry with tremendous challenges. However, it also proved beyond any doubt how remarkable Israel's entrepreneurs are, as they demonstrated an admirable display of resilience: founders raised funding while serving in active reserve duty, onboarded new customers between sirens, attended funerals in the morning, and hopped on Zoom calls at night. In short, they delivered in the face of the "perfect storm".
From an investor's perspective, the achievements, coupled with the challenges of 2024, reinforce the commitment to doubling down on Israeli entrepreneurs.
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?
2024 will end as a record year for exits ($13.4 billion), which is an impressive achievement that leaves plenty of room for optimism. However, it is important to remember that the seeds for these remarkable exits were planted about five to ten years ago via early-stage investments. Therefore, while investing in mature companies is important, we must not overlook the critical importance of early-stage investments, without whom Israel's future big tech companies simply won't grow. At RUNI Ventures, we remain focused on identifying promising companies and providing them with pre-seed funding, as well as high-touch support and resources to scale.
What are the three most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
Our main national mission should be to bring back foreign investors and eliminate all bureaucratic and business barriers hindering this process. The government should create incentives to allay investors' concerns and make their decision to invest in Israel an easy one.
Second, it should be noted that over 60% of this year's investments were directed toward mature companies (late stages) and therefore the government should keep providing pre-seed funding to lay the foundations for the establishment of new companies.
Third, the number of employees in the high-tech sector has stagnated over the past three years and it is crucial to prioritize investment in technological education, which has consistently proven to be our "iron dome".
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
2025 is expected to be a year in which the technological ecosystem in Israel experiences a 'baby boom' of innovation. Naturally, we anticipate a massive spike in defense tech, with many new developments emerging directly from the battlefield and new funds established to capitalize on these opportunities. The cyber sector, which accounted for 40% of total investments in Israel this year, is expected to continue leading and growing stronger. In addition to defense and cyber, I think that Israel is well-positioned to lead in other areas where it offers a strong competitive advantage and deep domain expertise, such as Health Tech, AgriFood Tech, and more.
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?
Competing globally in building AI models requires massive investments and vast computing resources, which Israel lacks. However, not leading in infrastructure does not lead me to the gloomy conclusion that Israel has missed the AI train. Israeli companies are successfully implementing advanced AI models to create vertical AI solutions designed for specific industries, combining deep domain knowledge with AI capabilities. These solutions are trained on industry-specific data, understand sector-specific terminology and regulations, and are optimized for tailored business processes. Therefore, I am convinced that Israel will champion vertical AI applications, transforming giant global industries.
From an investor's perspective: will the coming year be better for early-stage startups or mature companies?
Recently, one of the prominent international funds revealed that over 20% of its mature portfolio companies are becoming irrelevant because the solutions that took those companies years to develop have been rendered obsolete by AI. Therefore, although early stages are typically the most challenging period in a company's life cycle, the AI revolution also presents significant challenges for mature companies, forcing them to rethink their core products to maintain a competitive advantage.
As AI continues to gain momentum, the coming years will offer unprecedented opportunities for entrepreneurs to build new companies that are AI-native from day one. These companies will be able to scale faster and more efficiently with less funding, delivering immense value to their customers.
Did you raise fund money in 2024 for an existing fund or a new one? What are your expectations regarding this matter for 2025?
The war broke out in the middle of our fundraising process, presenting me with a significant challenge. Even under normal circumstances, raising a first fund as a sole managing partner is difficult - let alone doing so while the country is at war which also charged me personal prices. Fortunately, the investors recognized the unique advantages we brought to the table, such as favorable access to deal flow, professional resources to support the portfolio, and other benefits that are not standard in micro funds and we successfully raised the fund.
How many investments did you make in 2024, and how does it compare to previous years?
We made seven new investments, compared to three investments in 2023.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
All companies in the global SaaS market (valued at $317B in 2024 and projected to grow to $1,228B by 2032) face the same challenge: rising churn rates, which are at an all-time high. We invested in a revolutionary company name "JourneyZ" which developed an AI-powered platform that helps B2B SaaS companies prevent churn and unlock expansion opportunities by optimizing product usage at scale and addressing critical blind spots.
Leveraging cutting-edge technology, JourneyZ automatically understands clients' business needs, correlates these with product adoption, and generates actionable usage recommendations, ensuring sustained growth and enhanced customer satisfaction. The company is led by Guy Gadnir and Tamar Barzuza, experienced SaaS B2B executives (ex-CEO and CTO for Avaya) and the team is impressively scaling the industry’s first customer-value platform.
Two notable companies that you think will thrive in 2025.
Company Name: Canotera
Sector: Legaltech, Insurtech
Mission: Canotera provides best-in-class predictions of legal dispute outcomes.
Description of the product: Canotera harnesses the power of machine and human intelligence to provide robust, explainable, and detailed predictions on how litigation processes are expected to unfold. By doing so, Canotera allows its customers to chart optimized courses in the inherently murky waters of dispute-resolution domains, as it massively improves their case management capabilities; frees up resources to broaden their case onboarding reach; and empowers them to sharpen their business models while aligning their interests with their clients'.
Investment amount so far in total: $1M pre-seed, led by RUNI Ventures
Founding year: 2023
Reasoning why 2025 is their year: Actors in the litigation ecosystem are on the cusp of material enhancement to their effectiveness. Recent technological developments will enable basing decisions, legal arguments, and provision of client advice on much richer datasets while deploying reliable analytical tools that no unaided human could devise. Those who will be quick to adopt such technologies will win more cases, bet on the winning cases more consistently, and be able to improve their business models and grow their deal flow quickly. Legal practitioners now realize that AI is a friend and not a foe as a recent survey states that 79% of legal professionals already use AI in their work (up from 19% last year). Canotera intends to ride on this adoption tide, as it will release its MVP in New York State at the beginning of 2025, and from there expand to additional states and legal domains.
Company Name: Sequent Tech
Sector: Digital Elections
Mission: The world’s first end-to-end verifiable and transparent online voting platform
Description of the product: Sequent is revolutionizing the election industry by introducing a cryptographically secure and verifiable online voting solution for both private and public sector elections. Sequent’s online voting solution provides election managers with the confidence and tools they need to enable voters to vote remotely, digitally, and conveniently from anywhere in the world. Its unique open-source, research-backed technology creates unmatched transparency and trust in elections compared to any competitors in the space.
Investment amount so far in total: $1M pre-seed, led by RUNI Ventures
Founding year: 2022
Reasoning why 2025 is their year: Sequent has successfully conducted over 200 elections across 10 countries, with 3.6 million votes cast on its platform. Most notably, Sequent recently secured its first national-level election in collaboration with the Election Committee of the Philippines. The Sequent solution will be deployed in the 2025 Philippine national election, enabling 1.7 million overseas voters from 76 countries to cast their ballots online. Sequent continues its global expansion, working closely with governments to deliver secure, verifiable, and transparent online voting solutions for both overseas and domestic citizens. In 2025, Sequent is poised to secure additional contracts in South America, Canada, and the United States, further solidifying its position as a leader in digital democracy solutions.
