2025 VC SurveyShoni Health Ventures outlines the landscape of opportunities and challenges in 2025
2025 VC Survey
Shoni Health Ventures outlines the landscape of opportunities and challenges in 2025
CEO and Managing Partner Eran Lerer joined CTech to share insights on the year ahead and how HealthTech will be impacted.
“2025 presents a landscape of both opportunities and challenges. One notable opportunity is the expected surge in startups whose core technologies stem from military innovations,” said Eran Lerer, CEO and Managing Partner at Shoni Health Ventures. “This trend is driven by the experiences of reservists who, during the war, were exposed to cutting-edge technologies and trained to solve complex, real-time problems alongside multidisciplinary teams.”
Lerer joined CTech for its 2025 VC Survey to share how the HealthTech industry is expected to react to changing political and societal landscapes. As we settle into 2025, opportunities and challenges will become more apparent.
“The main challenge for 2025 will be restoring investor confidence in Israel’s innovation ecosystem,” he added. “Additionally, companies will continue to face pressure to demonstrate clear paths to profitability that would enable them to grow on the one hand and establish healthy underlying unit economics on the other.”
You can read the entire interview below.
Fund ID
Name of fund/funds: Shoni Health Ventures
Total sum of the fund: N/A
Partners: Eran Lerer
Notable/select portfolio companies (active): QuantHealth, AISAP, Append Medical
2024 is over. How can you summarize it in terms of the Israeli high-tech industry?
While 2024 was a challenging year globally, and even more so locally, the Israeli high-tech industry demonstrated resilience and achieved several notable success stories. Some startups raised mega-rounds, and there were several significant exits in sectors like Cybersecurity, HealthTech, and other fields.
The combination of global economic uncertainty, rising interest rates, and local challenges in Israel affected investment flows and valuations. Venture capital funding in Israel dropped significantly compared to its 2021 peak, mirroring the broader global trend of declining tech investments. Interestingly, both globally and in Israel, 2024’s investment numbers were similar to those in 2018. However, while 2018 was a "normal" year with no global crisis or local unrest, 2024’s context was far more challenging. Despite this, startups with strong teams and compelling value propositions managed to raise funds and excel.
Startups that raised capital in 2024 would be well positioned going forward, as their ability to navigate and raise funds in a difficult environment serves as a quality stamp for the future. It’s worth noting that even the strongest startups faced significant challenges, from key personnel being drafted for reserve duty to heightened caution from global investors. Looking ahead, there’s hope that 2025 will provide better opportunities for the many promising startups still navigating the storm.
Diving into specific segments, based on SNCs report, the HealthTech sector remained the largest sector in Israel. It represents more than 1,600 companies and 22% of all startups in Israel. To illustrate the potential of this sector, the prominent cyber segment includes 458 companies.
Demand for innovations in digital health, pharmaceuticals, and medical devices continued to grow globally, partially fueled by aging populations and the need for more efficient healthcare delivery. HealthTech exits in Israel in 2024 were extraordinary with amounts of up to $2.5B(!). These include Innovalve ($300M acquisition by Edwards), Belkin Vision (up to $466M acquisition by Alcon), and V-Wave (up to $1.7B acquisition by Johnson & Johnson)
Additionally, the AI boom continued to ripple across all sectors. Israeli startups that leverage AI tools or create proprietary AI-driven platforms drew strong interest from investors and customers alike - a trend that is expected to grow in 2025.
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?
2025 presents a landscape of both opportunities and challenges. One notable opportunity is the expected surge in startups whose core technologies stem from military innovations. This trend is driven by the experiences of reservists who, during the war, were exposed to cutting-edge technologies and trained to solve complex, real-time problems alongside multidisciplinary teams.
This experience builds unique entrepreneurial qualities like resilience, rapid problem-solving, and cross-functional teamwork, which are essential for successful startup founders. We’ve seen this phenomenon in the past with companies like Given Imaging, which transformed a military-based imaging technology into a groundbreaking medical device - a camera in a pill used for gastrointestinal diagnosis. We expect this pattern to repeat and meaningfully expand, with technologies originally developed for military use pivoting into civilian applications that could disrupt multiple industries. More specifically, many of these future entrepreneurs may target the HealthTech space, especially given their exposure to the realities of treating wounded soldiers and navigating the rehabilitation process (both mentally and physically) during military service.
With that, important to say that we wish the hostages will be brought home safe and healthy as soon as possible, and that a stable and safe environment will return.
HealthTech, Cyber, and AI-driven innovation across different sectors are poised for continued growth. The convergence of AI with healthcare presents a unique opportunity to reimagine clinical trials, remote patient care, and precision medicine. Along the same lines, at Shoni Health Ventures, we’re doubling down on the HealthTech industry by making new investments and actively supporting startups that leverage AI for healthcare solutions. We also continue to invest in medical devices, that experienced meaningful success in the last few months.
At Shoni, we utilize our global and local expertise to help our portfolio companies excel. We utilize our in-house commercial, operational and R&D experience from both the US and Israel. Through our unique affiliation with Sheba Medical Center and its innovation arm ARC, we provide unparalleled support to push companies forward toward success. Via ARC, we’re able to connect our portfolio companies to global partners of Sheba, which include leading global providers (hospitals), payers (health insurance companies), and strategics (global health corporates). We’re also able to provide access to high-quality medical data and to globally renowned clinical advisors.
The unprecedented support from Shoni and Sheba is there for entrepreneurs to leverage, if and how they deem necessary, making sure the entrepreneurs run the show and continue to leverage their unique capabilities and skills. We open doors, brainstorm and support, in order to have the entrepreneurs have the best possible conditions to succeed and thrive
The main challenge for 2025 will be restoring investor confidence in Israel’s innovation ecosystem. Additionally, companies will continue to face pressure to demonstrate clear paths to profitability that would enable them to grow on the one hand and establish healthy underlying unit economics on the other.
What are the most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
- Boost R&D Grants and Incentives: Increase funding for early-stage startups, especially those in high-risk, high-reward sectors, which have the potential to make our world a healthier and better place.
- Create incentives and reduce bureaucratic challenges: To make the Israeli innovation ecosystem more appealing to global investors and acquirers. Engage with global players to open R&D centers in Israel and push the innovation coming out of Israel to the next level.
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
Emerging sectors:
- AI-driven HealthTech: The combination of generative AI with healthcare decision-making is transforming health outcomes. Israel’s access to long-term electronic medical data gives it a unique advantage in this space.
- Medical Device Innovation: With recent exits totaling $2.5B, we expect to see renewed interest in the medical device sector, with more entrepreneurs entering the space and venture funds increasing allocations.
- Defensetech will be on the rise: Based on the ongoing conflict, technologies in defensetech are expected to foster
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?
Specifically in HealthTech, Israel still possesses a global competitive advantage of long-term electronic medical data that could be leveraged to drive AI solutions in the field. Israeli startups are deeply involved in AI, from drug discovery to diagnosing diseases. The local industry’s focus should be on applied AI - developing solutions with immediate commercial applications, that offer full solutions that address the different stakeholders in the complex HealthTech system.
From an investor's perspective: will the coming year be better for early-stage startups or more mature companies?
The late stage might need to be more focused on commercial traction and the early stage on setting strong foundations. While naturally different, both early-stage and late-stage startups face somewhat similar realities. Strong teams with innovative solutions that address burning unmet needs will attract funding. We expect the market to remain selective, but strong startups at both early and late stages will shine.
Did you raise fund money in 2024 for an existing fund or a new one? What are your expectations regarding this matter for 2025?
At Shoni Health Ventures, we have sufficient funds to continue investing in new startups in the coming years. Our primary focus will remain on early-stage Digital Health and MedTech innovation.
How many investments did you make in 2024, and how does it compare to previous years?
In 2024 we’ve made several investments, both in new companies (Digital Health and MedTech startups) as well as follow-on investments in existing portfolio companies”.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
One of the most exciting investments we made was in Lin Health, a HealthTech company providing a comprehensive solution for chronic pain via behavioral health interventions. We’ve invested in the company alongside Mayo Clinic, Viola, aMoon, and Saban. Following our investment, revenues grew 4 times in six months and the company won first place in the prestigious US HLTH startup competition.
Lin’s growing real-world evidence of decreasing pain among patients, and their high satisfaction rate (4.9/5 score) is the most rewarding part – Seeing the meaningful impact on the quality of life of patients around the world, who otherwise would have suffered from chronic pain.
Two Notable Companies That Will Thrive in 2025
Company Name: QuantHealth
Sector + description of the product/service: Digital Health. Enhancing the success of clinical trials via virtual prospective simulations (on the computer) – Clinical studies cost millions of dollars, take years, and 50% of them fail. The company can run clinical studies on the computer and with 86% accuracy specify if the study is expected to be successful or fail. Moreover, it could help refine the different parameters of the upcoming study (such as dosing, dosage, inclusion/exclusion criteria) to enhance its chances of success
Reasoning why this is their year: QuantHealth’s recent commercial agreements with seven of the largest pharma companies in the world position it well for major growth in 2025. Utilization of QuantHealth’s solution will bring more drugs to the world, faster, cheaper, and more effectively, to the benefit of millions around the world.
Company Name: Append Medical
Sector + description of the product/service: Medical Devices. Left Atrial Appendage elimination system (inside the heart) to prevent stroke in people with atrial fibrillation
Reasoning why this is their year: With promising clinical results in humans (first in human data) that were accumulated over the last few months, the company is well positioned to continue the clinical development towards a disruptive solution in this cardiology category of growing demand from patients.
