Israeli Tech Startups Secure Record $11 Billion in Investments

Israeli technology companies have attracted a record $11 billion in investments during the first nine months of 2026, marking a 50% increase compared to the same period last year. In the third quarter alone, startups secured $3.6 billion across 91 funding rounds, a 53% rise from the third quarter of 2025, according to a report by IVC and LeumiTech.

Cybersecurity remains the primary focus for investors, attracting approximately $4.3 billion since the start of the year, representing 38% of total funding. Corporate software also saw a significant surge in interest, accounting for nearly 30% of all investments in 2026, the highest since 2020. Conversely, sectors like defense tech, space, and quantum development experienced a slowdown, collectively receiving only about $170 million in the third quarter, a sharp decrease from the approximately $400 million received in each of the first two quarters.

Foreign investors play a crucial role, with foreign funds managing 66% of all funds operating in Israel and contributing over 70% of the investments. Funding distribution is uneven, with mid-stage companies showing the fastest growth, attracting about $1.8 billion (55% of the total) in the third quarter. Early-stage startups received around $1 billion, consistent with their average quarterly intake since early 2025, while late-stage companies secured approximately $840 million (23%).

Maya Eisen Zafrir, head of LeumiTech, described the over 50% year-to-date funding growth as a positive sign but noted the sector's uneven development, with a limited number of deals and capital concentrated in specific areas. Guy Holtzman, CEO of IVC, cited summer holidays, festivals, and global capital market uncertainty as challenges in the third quarter. Despite these factors, the sector continues to attract capital, foster new companies, maintain foreign investor presence, and develop new strategies.