Israeli VC fundraising rebounds as $8.7bn sits ready to invest

Israeli venture capital is showing clear signs of recovery after two slower years, with billions of dollars now available to fuel the country’s next wave of tech growth.

A new report from IVC Research Center and the Israel Innovation Authority published this week reveals that 47 new VC funds began operating in 2025 – more than double the 2024 figure and above the 10-year annual average – signalling a rebound in investor activity.

By the end of 2025, an estimated $8.7 billion in “dry powder” remained available for investment, providing a substantial pool of capital for Israeli startups despite ongoing global and regional uncertainty.

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The report, which analysed more than 2,200 VC-backed investments between 2020 and 2025, found that Israeli funds raised nearly $900 million earmarked for new investments, with a further $600 million expected to be allocated in 2026.

Dror Bin, CEO of the Israel Innovation Authority, said the figures highlight the sector’s resilience. “Despite volatility in global capital markets, Israeli VC fundraising is showing clear signs of recovery… capital continues to flow to Israeli technology companies,” he said, adding that the funding is helping to “fuel the creation of the next generation of globally competitive growth companies.”

The rebound follows a dip in activity during 2023 and 2024, with 2025 seeing increased momentum in both first and final funding rounds. A further 29 Israeli VC funds are currently raising capital, with combined targets exceeding $1.1 billion.

Guy Holtzman, founder and chairman of IVC, Israel’s leading data and business information provider for the high-tech industry, said the data shows the market regaining pace.“Israeli tech investors regained momentum in 2025… with nearly $900 million expected for new investments and about $8.7 billion in dry powder still available to support the next generation of Israeli startups.”

The report also highlights shifts in investor behaviour. While foreign corporate venture capital activity declined overall in recent years, participation in Series A and B rounds rose sharply in 2025, with investment volume up 45% compared with 2024.

At the same time, Israeli institutional investors increased their share of the market, accounting for 15% of total capital invested, up from 13% the previous year, led by Harel, More and Migdal.

Among venture firms, activity remained concentrated among both established and emerging players. F2, Team8 and TLV Partners were among the most active large investors, while Fresh.Fund led among mid-sized funds and Fusion topped the micro-VC category.

The broader ecosystem also continued to expand, with 14 new VC management companies established in 2025, bringing the total number of active firms to 240.

Despite geopolitical uncertainty, the overall picture is one of cautious optimism. With significant capital reserves and renewed fundraising momentum, the report suggests Israel’s high-tech sector remains well-positioned to sustain growth and continue producing globally competitive startups.