How badly has Israel’s tech industry been damaged by war over the past year? It depends on who you ask. This morning Israel Advanced Technology Industries (IATI), which also represents foreign investors and Israeli development centers for American companies, in cooperation with the RISE Institute for Policy and Research in Israel, established by Professor Eugene Kandel, published a pessimistic study entitled “The State of Israeli High-Tech – Under “A year of war.” According to the study, there was a 6% decline in venture capital investments in Israeli companies and a sharp decline of about 30% in the number of foreign and Israeli investments over the past year – October 2023 – September 2024.
In addition, the study found a trend of investments concentrated in a few companies, with the ten largest investments in 2024 representing about half of the total investments. Of particular concern is the figure indicating that 76% of companies that raised large sums are headquartered outside Israel. RISE Israel CEO Uri Gabbay warns in the report of the risks inherent in the current situation. “The war has created a perfect storm that threatens the future of Israeli high-tech,” he says. “The report we published shows, on the one hand, the resilience shown by the industry, but also warning signs and particularly worrying trends that are having a dramatic impact.” consequences for its future.
The pessimistic report contrasts with the relatively rosy picture published by the reports of the Israel Innovation Authority and IVC-LeumiTech. According to IVC-LeumiTech, investments in Israeli technology grew by 32% in the first nine months of 2024. While the IVC-LeumiTech report noted a slight decline in foreign investor participation, the RISE report saw a significant decline of about 30%. In the number of foreign and Israeli investors. The RISE report also notes that investments are concentrated in a small number of companies, with most of the companies that have raised significant sums located abroad.
In addition, the RISE report notes that Israel dropped in Tortoise Media’s international AI rankings over the past year from seventh to ninth, after Israel was in fifth place in 2021. In addition, the report found that about half of the companies it collected face Seed rounds in 2022 Difficulty raising follow-on rounds.
Gabbay summarized the report with recommendations for immediate action. “The Israeli government must present a vision that will give hope to investors and entrepreneurs, define a responsible economic policy, preserve democratic values and reduce international isolation. As long as current trends continue, Israeli high-tech may find itself in real danger, with serious damage.” for the country’s economy.”
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IVC-LeumiTech: Despite the start of the war, it raised 32%
The spirit of Gapay’s words is in almost complete contrast to the clean and celebratory language used by Maya Eisen Zafrir, CEO of LeumiTech, who said just yesterday, “Israeli high-tech, which continues to operate in the shadow of war, shows resilience and even maintains an encouraging growth trend compared to 2023. We are pleased that alongside the large deals, we are seeing a consistent increase in capital raising in the rest of the deals, quarter after quarter, since the beginning of the year as the October anniversary approaches “On September 7th, we realize how important Israel’s performance in the high-tech space is, which “He embodies the determination and resilience of Israeli entrepreneurs.”
Published by Globes, Israel Business News – en.globes.co.il – on October 1, 2024.
© Copyright Globes Publisher Itonut (1983) Ltd., 2024.