Remarkable year for Israeli tech as 2025 draws to a close

Israeli tech is ending 2025 on a high after a remarkable year that saw rising investment totals and a sharp increase in exit activity, according to early findings from IVC Data and Insights and Bank Leumi’s LeumiTech.

According to the data, companies raised $11.1 billion across 418 funding rounds, up 15% on 2024, despite a 9% fall in deal numbers, highlighting a more selective funding environment.

The selective approach was particularly evident towards the end of the year, with fundraising gaining momentum in the final quarter. Israeli tech companies raised $3.43 billion in the fourth quarter, a 45% increase on the previous quarter and 37% higher than the same period last year, even as the number of funding rounds continued to decline.

Exit activity also rebounded sharply. In 2025, the Israeli tech sector recorded 180 mergers, acquisitions and initial public offerings, with a total value of $17.7 billion. In addition, 13 announced transactions that have yet to close are expected to contribute a further $63 billion, potentially lifting total exit value to close to $80 billion.

Among the largest pending deals are Google’s proposed $32 billion acquisition of Wiz and Palo Alto Networks’ planned $27 billion purchase of CyberArk, both of which are subject to regulatory approval.

LeumiTech chief executive Mia Eisen-Tzafrir said: “The past year reflects the strength and continued growth of Israeli tech, despite a prolonged period of uncertainty and volatility in both the local and global arenas.

“The capabilities and reputation Israel has built over decades in cybersecurity, alongside the leadership we are seeing in AI, represent a strategic asset.”

Cybersecurity and generative AI dominated fundraising throughout the year, accounting for around 40% of funding rounds and approximately 70% of total capital raised. Even excluding unusually large funding rounds of more than $100 million, cybersecurity investment volumes exceeded those seen in 2021, previously a standout year for the sector. Funding in defence technology also reached an all-time high.

IVC chairman Guy Holzman said the return of large-scale deals marked a turning point after several slower years. “2025 ended with an exceptional achievement on the exits front,” he said. “Mergers and acquisitions have returned to – and in some cases exceeded – the levels we saw between 2017 and 2020.”

He added that the scale of the Wiz and CyberArk transactions, even before completion, had strengthened investor confidence.

“These deals provide confidence that Israeli high tech is robust enough to meet expectations even in challenging periods,” Holzman said.

The full Israeli Tech Review by IVC Data and Insights and Bank Leumi’s LeumiTech will be published in January 2026.