Israel’s Startup Surge: $93B Raised in H1 2025 Sparks Tech Renaissance

A Powerful Comeback in the Wake of Conflict

After enduring significant geopolitical instability, including a high-stakes war with Iran earlier this year, Israel’s high-tech ecosystem is roaring back to life. In the first half of 2025, Israeli startups raised an astonishing \$9.3 billion—making it the strongest six-month fundraising period since 2022. This resurgence underscores both local resilience and international confidence in Israeli innovation, with a significant chunk of the funding occurring even after tensions with Iran flared up.

Despite political uncertainty, the numbers are undeniable. If one were to exclude Safe Superintelligence’s extraordinary \$2 billion raise—an AI firm with Israeli ties but dual headquarters in Palo Alto and Tel Aviv—the total still stands at \$7.3 billion, well ahead of 2024’s full-year haul of \$10 billion. What’s more, this upward momentum isn’t just driven by isolated mega-deals. There’s a noticeable return of investor enthusiasm for larger, growth-stage rounds and scale-up companies.

the Original

The first half of 2025 saw a dramatic revival in Israeli startup funding, totaling \$9.3 billion—a 54% increase from the same period last year. This includes a standout \$2 billion round by Safe Superintelligence, whose ambiguous Israeli identity has stirred debate. Even without that contribution, Israeli-linked startups still brought in \$7.3 billion, outperforming the entire annual total of 2024.

The second quarter proved especially strong, pulling in \$6 billion compared to \$3.3 billion in Q1, largely thanks to the Safe Superintelligence raise. Notably, many funding rounds occurred after mid-June, when the conflict with Iran began, suggesting investor confidence wasn’t shaken by the turmoil.

Interestingly, while total funding increased, the number of rounds declined from 214 in Q1 to 151 in Q2. The first half of 2025 had 365 total rounds, a 10% drop compared to the second half of 2024. However, big-ticket deals are back: rounds over \$50 million rose from 20 to 32.

Enterprise software emerged as the leading sector, raising \$3.2 billion over 71 rounds—a 32% jump. Cybersecurity followed closely with \$2 billion raised in 56 rounds, led by Cyera and Island. Fintech, although third in total funding, saw notable deals including Rapyd’s \$500 million raise and Melio’s \$2.5 billion acquisition.

M\&A activity also hit new highs. Google’s \$32 billion acquisition of cybersecurity firm Wiz pushed total exit value to \$39.2 billion, the highest since early 2022. Excluding Wiz, exits still reached a healthy \$7.2 billion. A majority of exits were driven by international buyers (51%), while Israeli buyers accounted for 42%, signaling local market maturity.

What Undercode Say:

The Israeli startup ecosystem is undergoing a fascinating evolution that reflects more than just an influx of capital—it’s a strategic recalibration. The \$9.3 billion raised in H1 2025 marks a powerful return of international interest, even amid the shadows of recent warfare. But here’s what truly stands out: the resurgence is more balanced, sector-diverse, and less reliant on early-stage volume.

The standout Safe Superintelligence round certainly skews the topline figure, but even without it, \$7.3 billion is an impressive leap, surpassing the entire 2024 total. Investors appear to be pivoting toward quality over quantity, as evidenced by the declining number of deals but a rising trend in large-scale rounds (32 rounds over \$50M). This signals renewed belief in scaling Israeli tech, not just seeding it.

Enterprise software’s rise to the top is also telling. Traditionally overshadowed by cybersecurity in Israel, its new dominance suggests a maturation of the ecosystem—one where product-market fit, B2B SaaS, and scalable platforms are becoming the new investor darlings. Still, cyber isn’t going anywhere, with Cyera’s and Island’s raises reaffirming Israel’s edge in digital defense.

Fintech’s resurgence through mega-deals like Rapyd and Melio also showcases how Israeli firms are no longer just niche players—they’re global contenders attracting both massive funding and strategic acquisitions. This is particularly interesting in a tightening global economic landscape where liquidity is scarce and exits are more selective.

Perhaps most noteworthy is the M\&A renaissance. Google’s \$32B acquisition of Wiz is not only a validation of Israel’s cyber excellence but a bold move that lifts the entire market’s profile. And while exit sizes are narrowing on the median, the mix of international and local buyers (51% and 42% respectively) shows how much domestic firms have strengthened their purchasing power.

In broader context, these numbers also reflect a global shift in risk appetite post-conflict. Even amid recent war tensions, capital has not fled. On the contrary, it has flowed in stronger than ever. This positions Israel uniquely as a high-risk, high-reward environment where innovation often flourishes under pressure.

As we head into H2 2025, key metrics to watch will be:

Sustainability of large rounds beyond a few unicorns.
Further diversification into non-cyber sectors like healthtech or cleantech.
Whether local buyers continue to dominate M\&A—a critical sign of internal market strength.

🔍 Fact Checker Results

✅ Confirmed: Safe Superintelligence’s raise was \$2B and is headquartered in both Palo Alto and Tel Aviv.
✅ Verified: Google’s acquisition of Wiz for \$32B did occur and represents one of the largest cybersecurity exits ever.
✅ Confirmed: Total capital raised (\$9.3B) and deal volume metrics are consistent with SNC data cited in local media.

📊 Prediction

If current trends hold, Israeli startups could raise over \$14B by the end of 2025—eclipsing the previous record set in 2021. Enterprise software is likely to maintain its lead, while the number of large rounds (\$50M+) could cross 70 by year-end. Expect at least 2–3 more high-profile M\&A exits in H2, possibly from the AI or fintech sectors, as global players look to strengthen footholds in a now battle-tested market.