Israeli High-Tech Funding Dropped 60% In 2023 – Report

Investment in the Israeli high-tech sector fell by 60 percent in 2023, when compared to the previous year, according to a new report presented by an industry expert. 

According to the report by Asaf Horesh, general partner at Vintage Investment Fund, which summarized a challenging year for startups and funds, only 10 new funds raised a total of $1.4 billion in the first three quarters of the year, in contrast to 51 funds raising $4.5 billion in 2022. 

The Israeli government and key institutions in the high-tech sector have moved to shore up the industry over the past three months, fearing that the war against Hamas that began on October 7 would have an adverse impact on investment, creativity and productivity.  

Even so, the downturn was visible before the war started, with just $500 million raised in Q1 and Q3 and $400 in Q2. 

In 2022, however, fundraising volumes were $2 billion in Q1, $1.3 billion in Q2 and $700 million in Q3. 

Horesh was speaking at the annual Trends and Forecasts conference, which brings together hundreds of venture capitalists, angel investors, innovators, and serial entrepreneurs, and serves as a platform for Israeli startups to discuss and analyze trends in local businesses. 

This year’s event was organized by Guy Katsovich, founding partner of the Fusion Fund and Accelerator Program and the Pearl Cohen Zedek Latzer Baratz law firm,  both based in Tel Aviv. It focused on the performance of Israeli high-tech companies and the potential impact of the war as Israel heads into 2024. 

“The year 2023 proved to be one of the most challenging periods in the industry’s history, marked by numerous disruptions, challenges, and difficulties that surpassed any reasonable expectation,” said Guy Lachmann, senior partner at Pearl Cohen Hi-Tech Group.