Startup Nation Funding At Five-Year Low
Israel’s tech companies raised less funding in the last three months than any quarter since 2018, as the country suffered the effects of global recession and proposals for judicial reform.
Total investment was just $1.7 billion, down almost 75 percent on the $6.7 billion raised in the first three months of 2022, according to a new report by the Start-Up Nation Policy Institute (SNPI) think-tank.
At this rate, privately held companies will raise only $6.8 billion this year, a 60 percent decrease from last year and a 75 percent decrease from 2021.
So far, only 112 companies raised capital in the last quarter, down almost two thirds on the same period in 2022, and the lowest figure since 2014.
Three companies – Wiz, eToro, and Via – account for 40 percent of the $1.7 billion, and Wiz founders say none of its share will be used in Israel, in protest at the controversial judicial reforms.
The government’s judicial overhaul initiative – which was put on hold last week by Prime Minister Benjamin Netanyahu after months of domestic civil unrest and protests – has led to companies leaving the Israeli tech sector and moving abroad.
The weakening of the shekel has also contributed to the state of the Startup Nation.
SNPI warns that new startups established in 2022 or later will be particularly affected by the decrease in investments.