Initial figures for the IVC-LeumiTech report on Israeli tech for the first half of 2026, which was published today, show that Israeli privately-held technology companies raised $7.6 billion in the first half of 2026, up 52% from the corresponding period of 2025. In the second quarter, the tech companies raised $4.2 billion.
However, the increase in the amount of capital raised does not reflect an expansion of the overall fundraising market. The number of fundraising rounds continued to decline, and in the second quarter amounted to only 97 deals. According to the report, since 2023, the number of fundraising rounds has averaged slightly more than 100 per quarter, compared with about 140 rounds per quarter in 2019-2020. This means that more money is entering Israeli tech, but it is concentrated in a smaller number of deals and in relatively few companies, a trend that has also characterized the global venture capital market in recent years.
Cybersecurity retains primacy, defense-tech continues to grow
The distribution of investments between the fields also remained similar to recent years. The cybersecurity field continued to be the main attraction for investors, with fundraising of $ 2.57 billion in the first half – about 34% of all capital raised. This maintains the sector’s position as the leader in capital raising in Israel’s tech industry, having already led the market in 2024 and 2025.
At the same time, the defense-tech, space, and quantum computing sectors continue to gain momentum. Companies operating in these fields collectively raised $846 million in the first half of the year – an amount that is almost equal to all the fundraising recorded in these sectors during all of 2025.
The report also updated the methodology for measuring AI companies: instead of referring only to GenAI companies, it now includes companies in which AI is at the core of the product or technology. According to the new definition, Core AI companies raised $1.6 billion in the first half, although IVC emphasizes that there is overlap between this category and other sectors, primarily cybersecurity.
Large companies attract most of the money
The data also indicate a growing gap between mature companies and young startups. In the second quarter, companies in the growth and late stages raised about 83% of all capital raised, while companies in the seed and early stages raised only $719 million, a decline compared with more than $1 billion in each of the three preceding quarters.
According to the report, one reason for this is the impact of the macroeconomic environment. Companies raise capital in US dollars, but most of their expenses, primarily salaries, are paid in shekels. The strengthening of the shekel, along with the increase in wages in the industry, are eroding the purchasing power of the funding and making it difficult, especially for young companies, which have fewer sources of income and less financial flexibility.
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On the other hand, mature companies are managing to cope better with the changes and have even significantly increased the volume of funding. At the same time, the proportion of foreign investors remained relatively stable and stood at 69.1% of all venture capital funds and investment arms active in Israel in the first half, a figure indicating that despite the security and economic challenges, Israel continues to maintain its position as one of the main investment destinations in the technology industry.
Published by Globes, Israel business news – en.globes.co.il – on July 2, 2026.
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