Amidst regional conflicts, worldwide instability, and a fairly stagnant IPO market, the Israeli tech sector has demonstrated its robustness and resilience over the past twelve months. Emerging startups in Israel have continued to scale their revenues, customer counts, teams, and business operations, generating hundreds of millions in revenue and achieving valuations in the billions. M&A activity has continued to thrive, with 90 transactions for more than $14 billion—an increase of $6 billion from the previous twelve-month period.
To mark Israel’s 76th Independence Day, we put together a list of the most notable recent achievements in Israeli tech, particularly in terms of exits, substantial funding rounds, and the creation of significant value by startups of all stages.
Funding Rounds: Fueling Innovation
The Israeli tech ecosystem has witnessed an influx of capital through significant funding rounds, propelling the growth and expansion of local startups. Companies like Wiz, VAST Data, Cato Networks, Axonius, Cyera, and Island have grown at an incredible pace and attracted substantial investments, bolstering their capabilities and fueling further innovation.
Of particular note are the recent funding rounds of Wiz and VAST Data, the latter of which is in the Next47 portfolio. These companies have reached valuations of $12B and $9B respectively, both of which are unprecedented in the market. These financing rounds signal high investor confidence in the ecosystem and allow these companies to continue growing at record-breaking speeds.
Exits: A Resilient Market
In addition to large financing rounds, over the past twelve months, the Israeli tech ecosystem has seen dozens of exits, ranging from medium and large-sized acquisitions to mega-deals surpassing the billion-dollar mark.
In the medium category, we included companies that exited for between $150M and $300M, and we’ve seen incredible value created from relatively young startups.
In the large exit category, with sale prices in the $300M to $500M range, we’ve seen record-breaking velocity from a number of companies, including one from the Next47 portfolio: Noname. Gem & Avalor both broke historical records and reached $350M acquisition deals in only ~2 years from their founding dates—nothing short of extraordinary.
In the extra-large category, exits greater than $500M, BioCatch stands out as a realized unicorn (more than $1B). The acquisitions of Run:ai and Deci by Nvidia were a huge statement from the tech giant and a great way to kickstart Israel’s Generative AI startup boom. Talon was the largest acquisition by Palo Alto Networks in Israel since the acquisition of Demisto in 2019 for $560M.
Conclusion: A Reason For Optimism
As we review this past year’s data, we do so with a strong sense of pride and optimism. Many Israeli companies have graduated from their startup days and have now grown large enough to become meaningful acquirers themselves. They have started to compete with industry giants in purchasing “Blue and White” technologies for hundreds of millions of dollars. Recent examples include Wiz acquiring Gem, Armis acquiring Silk, and Check Point acquiring Perimeter 81.
Overall, Israeli tech companies have demonstrated remarkable resilience, growth, and maturity over the past year, while breaking several records. The ecosystem’s resilience is a testament to the adaptability and perseverance of entrepreneurs amid challenging times, giving us all numerous reasons for optimism. Next47 is proud to be an active investor in this phenomenal ecosystem.