Tech TLV"2024 was a year of war, but it was a record year for exits"
Tech TLV
"2024 was a year of war, but it was a record year for exits"
"Startups in Israel still managed to raise nearly $10 billion in 2024, ranking third globally after Silicon Valley and New York. In other words, we maintained a strong overall financing volume," Innovation Authority CEO Dror Bin said at Calcalist and LeumiTech's Tech TLV conference.
"My role brings together everyone involved in the Israeli ecosystem, and in recent years, we have experienced a tremendous roller coaster. The pandemic, geopolitical changes, the war, and the political situation—all of these challenges have affected us. Yet, Israeli high-tech continues to lead despite everything," noted Innovation Authority CEO Dror Bin at Calcalist and Leumi Tech's Tech TLV conference.
According to Bin: "They say that high-tech is the locomotive of the economy—and for good reason. Twenty percent of Israel’s GDP comes from high-tech. The Israeli economy’s dependence on the sector is enormous. On a micro level, however, the war has created significant challenges. Data we’ve gathered shows that 62% of companies report not meeting their development and sales goals due to the war, while 74% claim it has become difficult to conduct business from Israel, largely because of issues related to flights."
Despite these obstacles, Bin expressed optimism: "On a macro level, between 2012 and 2022, the number of people employed in high-tech doubled. However, we’ve been experiencing a fundraising stagnation over the past five to six months, and high-tech growth has slowed. Looking deeper, cyber, fintech, and enterprise software attracted 36% of investments in 2017, but in 2024, that figure doubled, meaning there’s less funding for other sectors.
"That said, when you look at 2024 as a whole, we returned to the fundraising volumes of 2019. A significant portion of the funds went to companies with lower risk, making it more challenging for sectors outside of software to secure investments. However, startups in Israel still managed to raise nearly $10 billion in 2024, ranking third globally after Silicon Valley and New York. In other words, we maintained a strong overall financing volume. Beyond that, 2024 was a record year for exits."
Bin added, "But the question remains—are we growing or shrinking in terms of investments? In 2024, we saw a 16% increase in investments compared to 2023. While this isn’t an extraordinary figure, it’s not insignificant, especially in a year marked by security threats.
"It’s impossible not to talk about artificial intelligence, a field with tremendous potential. Israel is in an excellent position in AI, with about 2,200 companies already implementing AI in their services. Today, the entire world is investing in AI, and we must focus on developing education, infrastructure, and regulation to stay ahead."
The Innovation Authority itself has taken significant steps over the past year to ensure the continuity of Israel’s high-tech ecosystem. Bin elaborated: "For example, we have the Tnufa fund, which provides grants to entrepreneurs—up to 200,000 shekels to validate ideas. In 2024, we saw a 63% increase in submissions to the fund. Despite the challenges, such as alarms at night and reservists being called up, this is a very optimistic sign. It shows people stepping out of their comfort zones, generating innovative ideas, and making me hopeful for the post-war period.
"This is the time to increase investments and ensure that Israel continues to foster a thriving and growing business environment that sustains the momentum of our high-tech sector. To that end, we launched a channel that funded about 250 startups, giving them some breathing room. Additionally, we have the Yozma fund, which encourages Israeli institutional investors to invest in venture capital funds, and the Deep-Tech startup fund. On the taxation front, we’ve focused on enhancing tax knowledge for multinational companies and foreign investors."
