IVC-LeumiTech: Tech fund raising up 38% in 2024

Israeli privately-held tech companies raised $9.58 billion in 2024, up 38% from 2023, IVC-LeumiTech reports. The report is generally optimistic despite a 4% fall in fund raising in the fourth quarter of 2024 from the preceding quarter although the amount raised was 60% higher than the corresponding quarter of 2023, when the war broke out.

However, it should be noted that the IVC-LeumiTech figures include former OpenAI executive Ilya Sutskever’s Safe SuperIntelligence (SSI), which is a US company that opened an Israeli subsidiary, but as far as is known does not yet have any Israeli employees. Without the $1 billion that SSI raised, Israeli startups raised $8.58 billion, still a very high figure by historical standards except for the peak years of 2020-2022.

Israeli investment reaches a low point

But while investment figures in Israeli tech have stabilized almost 15 months after the outbreak of the war, IVC-LeumiTech’s 2024 report reveals the worrying trend that the number of Israeli investors in local tech companies has reached a low for recent years. In the fourth quarter of 2024, only 159 Israeli venture capital funds and institutional entities were partners in investments in Israeli startups and growth companies. According to the report, there was a rise in the number of Israeli investors in early 2024 compared with the quarter in which the war broke out, and the number of investors reached 229, but gradually decreased towards the end of the year, and now stands at a number even lower than in the months after October 7.

In the boom times of early 2022, the number of Israeli funds and institutional investors was 548, but even in periods considered less bubble-like and calmer, such as the fourth quarter of 2018 and 2019, there were 240 and 280 investors in tech companies. Overall, there was a slight recovery in the number of investors in Israeli tech, due to a stabilization in the number of foreign investors and their numbers rose from 257 in the third quarter of 2024 to 266 in the fourth quarter. These are levels that were last recorded only in the second half of 2018.

Another low was also recorded in the number of new investors – that is, investors for whom 2024 is their first year of investment in Israeli tech. After 726 such investors were recorded in 2023, in the analysis of this year’s investment rounds, only 422 new investors were seen. However, the report’s authors admit that there is no certainty that this is the final number, and it is estimated that only later next year will additional unreported fundraising rounds be counted, so that it will be possible to reach a new number of investors, ranging from 700 to 750, compared with about 800 in all of 2023.

Mega-rounds back on the rise

IVC-LeumiTech reports a return to a higher number of mega financing rounds of $100 million or more, which represented 48% of all the money raised in 2024 – the highest such figure since 2021, which saw a huge number of such rounds by unicorns. The amount of money raised by cybersecurity companies was 38% of all the money raised – a record high percentage – with Wiz raising $1 billion and Cyera raising $300 million.

Published by Globes, Israel business news – en.globes.co.il – on December 30, 2024

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