In the first quarter of 2026, Israel technology startups raised $3.1 billion in 98 investment rounds, 34% more than in the corresponding quarter of 2025, according to figures from IVC and LeumiTech.

At first glance, this looks like a significant jump, continuing the trend of recovery from the decline in activity that followed the attack by Hamas in October 2023 and the ensuing war, and bringing us back to the levels seen at the beginning of the decade. The number of investment rounds, however, remained almost unchanged, which may mean that the rise in the amount of capital raised does not stem from a significant expansion of activity but rather from a few large deals.

Over the past two years, the amount raised per quarter has been fairly stable at around $2.7 billion, so the first quarter of this year mainly stands out against a weaker period.

Raise money now, report later

it is also important to point out that a significant portion of the investment rounds reported in the quarter was not the product of the current period of hostilities. There is an inbuilt gap in the venture capital market between the time when a deal is closed and when it is reported, and the delay can sometimes be months, or even longer. Many companies choose to publicize investment rounds with strategic timing, in accordance with considerations of the market and exposure, and not necessarily when the deal is completed. Some of the amounts included in the first quarter therefore reflect investment decisions made before the current escalation of fighting with Iran, in periods of relative stability. This means that the figures are not evidence of activity during wartime, but are mainly an accumulation of deals made earlier and reported now.

Seasonality is also an important factor in interpreting the data. The first quarter is traditionally strong, partly because of the annual RSA Conference, one of the main events in the cybersecurity industry, which took place this year from March 23 to 26, and which represents a stage for announcing investment rounds and product launches. Many companies time the reporting of their investment rounds to coincide with the conference in order to maximize exposure, even when the money itself was raised months before. The result is a concentration of positive announcements at the beginning of the year, mainly in cybersecurity, which accounts for 40% of the total investments, but, as mentioned, this does not necessarily reflect a change in the actual rate of investment.

The structure of the market continues to indicate increasing concentration. Alongside the dominance of cybersecurity and the advance of AI, which accounts for 16% of total investments, the number of investment rounds, as mentioned, remains fairly low, and is 35% lower than the average for 2020. The capital is being concentrated in fewer companies and in larger rounds, with a substantial proportion going to the largest deals.

According to the report, over 40% of the capital raised was in early rounds, while intermediate rounds have shrunk to just 29% of the total. This trend is liable to cause difficulties for growth companies, which are the industry’s main employment engine, and which are finding it hard to raise finance at advanced stages.

Foreign investors still dominate venture capital raising in Israel, accounting for 65.9% of the activity in the first quarter of 2026, although there has been a gradual decline in comparison with previous years, while local funds are taking a slightly larger share of early rounds.

Published by Globes, Israel business news - en.globes.co.il - on March 30, 2026.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.