2025 VC Survey“The Israeli high-tech sector stands at a pivotal crossroads”
2025 VC Survey
“The Israeli high-tech sector stands at a pivotal crossroads”
Yair Snir and Barrel Kfir from Dell Technologies Capital made the remarks for CTech’s 2025 VC Survey.
“The Israeli high-tech sector, long regarded as the growth engine of the local economy, stands at a pivotal crossroads,” said Yair Snir and Barrel Kfir of Dell Technologies Capital. “Global economic, societal, and technological shifts call for a reevaluation of the current model and a redefinition of Israel’s role as a ‘Tech Nation’.”
Snir and Kfir both made the observation during an interview with CTech for its 2025 VC Survey, which asks prominent investors for their thoughts and predictions for the year ahead. The duo made the observation that Israel’s Startup Nation will need to evolve if it intends to foster new opportunities for innovation.
“The challenge ahead lies in evolving from ‘Startup Nation’ to a sustainable ‘Tech Nation’ that thrives globally while also contributing locally,” they continued. “This requires a new approach, integrating global innovation with significant impact on Israel’s domestic market. Expanding high-tech activity geographically, particularly to peripheral regions, will not only bridge economic and social gaps but also foster new opportunities for innovation.”
You can read the full interview below
Fund ID
Name of fund/funds: Dell Technologies Capital (DTC).
Total sum of the fund: DTC invests approximately $150-200M per year, globally.
Partners: Scott Darling (President), Yair Snir, Barrel Kfir
Notable/select portfolio companies (active): Redis, VAST Data, Rivos, Ibex, Descope, Entro Security, Twine
Notable exits: JFrog, Zscaler, Docusign, Nasuni, Guardicore, Adallom, Nutanix, Lightspin
2024 is over. How can you summarize it in terms of the Israeli high-tech industry?
2024 is a year that proved the resilience of the Israeli innovation ecosystem. It’s also the year we saw the Israel cyber community further cement itself as a global leader in building significant businesses in the sector. Seven out of the top 10 venture-backed cyber exits globally in the past few years were Israeli companies. Cyber investment made up nearly half of all venture investment in Israel in 2024. So you can see a path to Israel continuing to dominate exit activity in the coming years.
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?
The Israeli high-tech sector, long regarded as the growth engine of the local economy, stands at a pivotal crossroads. Global economic, societal, and technological shifts call for a reevaluation of the current model and a redefinition of Israel’s role as a "Tech Nation."
The challenge ahead lies in evolving from "Startup Nation" to a sustainable "Tech Nation" that thrives globally while also contributing locally. This requires a new approach, integrating global innovation with significant impact on Israel’s domestic market. Expanding high-tech activity geographically, particularly to peripheral regions, will not only bridge economic and social gaps but also foster new opportunities for innovation.
Despite the challenges posed by war and global economic uncertainty, the Israeli high-tech sector has demonstrated exceptional resilience. Global partners express admiration for its strength and adaptability, reinforcing Israel’s position as a global leader prepared to tackle the challenges and opportunities of 2025 and beyond.
In addition, while we’ve clearly proved that indeed, ‘Israeli tech delivers, no matter what’, as we’re hoping for the war to reach an end in 2025, there’s a lot of unknown yet with regards to the post war effects and its mid-long term impact in the Israeli tech scene.
How will new American leadership affect the global high-tech industry or economy? And where does this place Israel and its entrepreneurs?
Early-stage venture is a long horizon business. We back people who are building solutions to address current and future challenges for global enterprise businesses. The best founders ignore the external noise to focus on their mission of building consequential technologies that will be in demand no matter the global or domestic political and economic situations.
What are the three most important things the Israeli government should do today to accelerate the high-tech engine in the coming year?
To continue positioning Israel as a leading global Tech Nation, where Israeli technology serves both the world and the local economy, emphasis must be placed on targeted initiatives that ensure sustainable growth and strengthen the high-tech ecosystem. Expanding high-tech activity to the periphery is critical for unlocking innovation, reducing socio-economic disparities, and driving nationwide growth. Encouraging the integration of Israeli technologies in local sectors such as healthcare, education, and infrastructure can improve citizens' quality of life while bolstering the domestic economy. Reforming academic programs to align with modern tech demands will help close critical skills gaps and foster diverse talent, ensuring Israel maintains its competitive edge in the global tech landscape.
Are there new sectors you see as relevant? Are there any fields you anticipate will weaken significantly in the coming year?
Emerging sectors like Defensetech, smart energy management, and AI present significant growth opportunities as global energy consumption rises. Israel must lead these fields locally and globally, leveraging its technological innovation to solidify its position as a global tech leader.
Similarly to becoming a global leader in water-tech, a resource that Israel has been lacking, Israel, as a country with limited natural energy resources, can potentially become a global leader in energy-tech. The need for energy is expected to grow significantly in the coming years, addressing the EV’s and AI compute energy requirements.
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?
Are we missing out? No. We’ve got talented teams developing and selling applied AI solutions across cyber, defense, and enterprise automation. If there’s a challenge, it is that we may be behind in funding foundational AI research. At the same time, the enterprise is looking for AI to solve real-world problems today. Founders should focus on these technologies to compete globally and build actual businesses.
Could the global IPO drought end in the coming year?
There is potential for the IPO market to pick up later this year. There’s pent-up demand and there are many healthy-looking companies in the enterprise tech space that could definitely be considered “IPO ready.” But it’s not a sure thing. If we’ve learned anything from the last two years, those same companies are comfortable staying private. There’s no reason for them to rush out into a lukewarm market. And of course, any geo-political or economic hiccups could keep the IPO window closed.
From an investor's perspective: will the coming year be better for early-stage startups or more mature companies?
2025 has the potential to be good for both early-stage and later-stage companies but with an edge given to earlier-stage companies. Early-stage companies have the obvious benefit of longer horizon views but the challenge of developing differentiated solutions in some areas that are increasingly oversubscribed. Later-stage companies have a couple of challenging years to prove themselves as solid businesses. They might benefit from the New Year optimism that M&A and IPO activity will pick up. But that optimism could fade fast depending on how the next couple of months go.
How many investments did you make in 2024, and how does it compare to previous years?
In the past year, we invested in the Cyber, Data, and AI sectors. In Israel, we made four investments, and globally, the fund made 11 investments. In previous years, we’ve typically made up to three investments a year in Israel.
Provide an example of an intriguing investment you made in 2024. What sets this company apart, or what is distinctive about its sector?
Twine, a cybersecurity company, emerged from stealth in 2024 and raised $12M in seed funding co-led by Dell Technologies Capital and Ten Eleven Ventures. Twine’s innovative AI-powered digital employees address the global cybersecurity talent gap, starting with identity management.
Two notable companies that you think will thrive in 2025.
Company Name: Treevesse
Sector + description of the product/service: Data & AI. LakeFS is becoming the world’s leading data version control player, enabling organizations to move and develop at growing paces
Investment amount + total: DTC led the Series A with $8m. In total, the company has raised $23m
Founding Year: 2020
Reasoning why this is their year: As the need for pace and collaboration around data is increasing, as part of the AI/Gen AI adoption, Treeverse is becoming a must-have product for any mid-large organization, and we're seeing high demand from F100 firms.
Company Name: VAST Data
Sector + description of the product/service: Data + AI, The VAST Data Platform unifies storage, database, and containerized compute into a single, scalable software platform to power AI & deep learning in modern data centers and cloud
Investment amount + total: DTC has led the Series A and has invested a total of $13m, out of over $250m that has been invested in the company to date
Founding Year: 2016
Reasoning why this is their year: As the adoption and consumption of AI continues to grow, VAST Data is perfectly positioned to address the growing need by global leading players in the space for a unified data platform, offering superior performance and unit economy.
