Israeli Tech Raises $3.6 Billion in Q3, Cyber Dominates Funding

Israeli technology companies secured $3.6 billion in funding during the third quarter, participating in 91 funding rounds. This represents a 53% increase compared to the same quarter last year, though it is a 14% decrease from the $4.2 billion raised in the previous quarter. Year-to-date, Israeli tech has raised approximately $11 billion, a 50% increase over the same period in 2025. Preliminary data was released by IVC and LeumiTech, with a full report expected next month.

The cybersecurity sector attracted $1.7 billion, accounting for 47.2% of all funding in the quarter. This marks a significant jump from the first half of the year, when cybersecurity represented one-third of the total funding. A substantial portion of this cyber funding, nearly a quarter, went to Sayara, which raised $400 million from Goldman Sachs' alternative investments arm. Sayara's valuation has grown significantly since its founding in 2021 by former Talpiot and Unit 8200 graduates, reaching $12 billion in its latest funding round.

Enterprise software was the second-largest sector, attracting $1.1 billion, or 30% of the quarter's funding, its highest volume since 2020. Both cybersecurity and enterprise software, driven by the increasing adoption of AI agents by large organizations, accounted for approximately 78% of the total funding. Defense, space, and quantum companies collectively raised $170 million, a decrease in their share of the market.

In terms of funding stages, mid-stage companies raised $1.8 billion, early-stage companies secured about $1 billion, and late-stage companies received $840 million. The number of funding rounds continued to decline, with 91 rounds in Q3 compared to an average of 102 per quarter in the first half of the year. However, the average funding per round increased to nearly $40 million.

Foreign investors were behind approximately 70% of the investments in the quarter, a stable percentage compared to the previous year. While the total funding amounts are rising, the number of companies successfully closing rounds is decreasing, indicating a more challenging market for early-stage companies seeking their first funding round.