From the outside, Israel’s current moment might resemble an angry bees’ nest crammed into a tumble dryer — chaotic and in crisis. But for international investors eyeing the country’s climate-tech sector, there’s still plenty of honey to be found.

The Climate Tech Status Report for 2024–2025, jointly released by the Israel Innovation Authority and PLANETech, paints a picture of an ecosystem that, despite global and local upheaval, is holding its ground — and in many ways, growing.

Foreign trust in Israeli innovation

The report notes a 39 percent drop in climate tech investments in Israel over the past year — from $1 billion in 2023 to $613 million in 2024 — which is right in step with a global decline of 41%. Yet the sector is still bustling, with 946 active companies, including 49 newly established in the past 12 months.

Of the 49 new climate-tech startups founded since mid-2023, 27% focus on advanced food technologies, while others address smart agriculture and food waste. Nearly a quarter of these companies have already raised a collective $15.36 million.

The year had its fair share of declines. Climate tech made up 14.5% of all Israeli tech investment in 2023, and that dipped significantly to 6.4% in 2024. Large funding rounds ($10 million or more) declined from 25 in 2023 to 14 in 2024.

That said, early-stage deep-tech ventures, especially those emerging from Israel’s tech incubators, continue to attract attention, and at least 10 international VCs made repeat investments in Israeli startups in the past year. Major global corporations — including Microsoft and Volkswagen Group — continue to participate through corporate venture arms.

Although the number of funding rounds fell from 135 to 90, international investors were involved in over 90% of those deals, which shows that foreign investors still believe in Israeli climate-tech companies.

“Even as global investments sharply decline, Israel maintains relative stability, continues to establish dozens of new companies, and enjoys sustained international trust,” said Dror Bin, CEO of the Israel Innovation Authority.

“Over 90% of investments involve foreign partners — a clear message of global confidence in Israeli innovation.”

Early-stage growth

Around 58% of Israeli climate-tech startups are in the pre-seed and seed stages, which means that there’s a lot of potential energy stored up for some long-term growth. At the same time, 18% have already reached Series A or later, which means that the sector is also seeing short-term growth.

The IIA has continued to back the sector with increased public investment. In 2024 alone, it injected a record $105 million — part of $257 million in total public funding over the last three years. Israeli companies also brought in 105 million euros through the EU’s Horizon Europe program between 2021 and 2023.

The report concludes that, with $9.5 billion raised since 2018 and a projected growth to $2 trillion by 20230, Israel’s climate-tech sector is not only weathering geopolitical and economic storms, but also laying the groundwork for future expansion.

“Despite the complex security situation, Israel’s climate-tech ecosystem continues to demonstrate exceptional resilience,” said Rotem Trivitsky, director of PLANETech. “In a world where the climate-tech sector is grappling with challenges of growth and maturity, this resilience is exactly what is needed to achieve a real breakthrough.”