According to a report by LeumiTech and IVC, the second quarter of 2024 saw record-breaking funding, with Israeli tech startups raising $2.9 billion across 110 fundraising rounds.

This achievement marks the highest level of funding in two years (since Q4 2022) and implies significant recovery and growth within the industry, considering the ongoing turmoil that the country finds itself in.

This impressive funding figure represents a 78% increase from the first quarter of 2024 and a 47% increase from the same period in 2023. Part of that success can be traced to Wiz, a cybersecurity firm which earlier completed the highest recorded funding round in Israeli history, raking in $1 billion in investments at a valuation of $12 billion.

The quarter also saw an increase in the number of large deals, with six transactions exceeding $100 million each, greatly contributing to the overall funding amount.

Even without the massive round raised by Wiz, though, the sector still garnered $1.93 billion, indicating a 19% rise from the previous quarter.

A notable trend this quarter was the return of foreign investors, including several first-time investors in Israeli tech, despite the ongoing conflict.

Over the last few months, foreign investment had taken a dive following the outbreak of Israel’s war with Hamas in Gaza; even before the war, controversy surrounding judicial reform led to the departure of foreign investors.

According to analysis by Calcalist, however, there is cause for concern as an increasing number of new startups are registering themselves outside of Israel. This trend could distort investment data, making it seem like less money is being invested in Israeli tech, and could also lead to a brain drain, as talented people may move abroad, which would reduce tax revenues and the overall economic benefits that come from having a strong tech sector.

However, the new influx of foreign capital could be a sign of renewed confidence in the Israeli tech ecosystem’s potential and stability.

“In the in-depth checks we did regarding the identity of the investors, it is encouraging to see foreign investors – who have never invested in Israel – taking part in transactions even since the beginning of the war,” said Mia Eisen-Tzafrir, LeumiTech’s CEO.

“We are happy to see that the signs of recovery felt in recent months are also reflected in the second quarter data. The data demonstrate growth in the number of deals and the transaction amount compared to Q1/2024 and the corresponding quarter last year. If such activity volumes continue, we are at a pace where the tech sector will finish a year of growth compared to the previous year,” she said.