Israeli tech concludes the first half of 2026 with a surge in total capital fundraising for the local innovation industry with NIS 7.6 billion, representing a 52% increase compared to the first half of 2025 – This is according to the Tech Review report by LeumiTech and IVC published this morning (Thursday).

The fundraising volume returned to the capital fundraising scale of 2020 and even surpassed, in just six months, the total fundraising of the entire year of 2023, which then stood at approximately $7.3 billion. The bulk of the amount raised in the first half of 2026 is attributed to the second quarter of the year and stood at $4.2 billion, despite the intensifying trend of employee layoffs in tech, the reason for which employers mainly attribute to the strengthening of the shekel against the dollar.

The cyber sector led the fundraising with $2.57 billion across the entire half – About a third (33.8%) of all capital raised, representing a continuation of the activity level that characterized the sector over the past two years, during which companies in the field raised $4.82 billion in the entire year of 2025 and $3.62 billion in the entire year of 2024.

Companies in the fields of defense-tech, space, and quantum computing also experienced an increase in investments and absorbed $846 million of the total fundraising amounts for the first half of 2026, representing about 89% of the aggregate fundraising of these sectors in the entire year of 2025.

The investment trend in Israel continues to be broad-based and leverages the advantages of blue-and-white innovation at any given time, while globally the bet is on AI, but the investment surge overseas was much higher, with a surge of about 150% in investments that stood at approximately $330 billion in the first quarter of the year alone. This involves just ten fundraising rounds of $2 billion and above, which together contributed over $206 billion to total global investments.

The bulk of funds for Israeli tech continues to flow from foreign investors, who accounted for 69.1% of total fundraising compared to about 68.4% last year and compared to about 74% during the years 2016–2023. Factoring in the increase in the fundraising amount, some estimate that the figure confirms the increase in the volume of investments by local investors.

The majority of companies that absorbed the investments were companies in an advanced life cycle and growth stages, which concentrated 83% of all fundraising compared to about 60% in the first quarter of the year, while young startups remained thirsty for cash. The primary direction of funds to the more advanced companies is attributed to the strengthening of the shekel against the dollar, which increases the cash burn rate among the younger startups and the risk involved in investing in them as a result.

It is doubtful whether the current plan of the Ministry of Finance to save tech will provide the answer, but if the capital market and the government do not find a solution to the capital erosion of Seed and Pre-Seed entrepreneurs, Israeli tech may discover in a few years that while it might have grown a magnificent treetop, the roots that are supposed to nourish it have completely dried up.