Israel sees record-breaking $10.5 billion in startup acquisitions

More than 200 venture capital partners, investors, and entrepreneurs gathered in Tel Aviv on Thursday for the annual 2024-2025 Trends and Forecasts conference.

The conference was spearheaded by Pearl Cohen, a law firm, and Fusion VC, a US-based venture capital firm and accelerator for Israeli startups. It included several surveys and reports on Israel's startup ecosystem.

Israel's mergers and acquisitions market saw a record-breaking high of $10.5 billion in 2024, Israel's best year ever, with Israeli startups securing $8.1 billion in funding, according to a report presented by Asaf Horesh, managing partner at Vintage Investment Partners.

This comes amid ongoing economic troubles in Europe and the US and as Israel faces an ongoing, multi- front war.

According to the report, while the total number of deals dropped to 434 from 682 in the same period last year, the total amount of funds raised by the startups increased to $8.1 billion, up from $7.3 billion.

The fact that the total funds raised for this year have increased despite the decrease in the number of deals means that the companies that did succeed often managed to raise larger sums.

According to an investor study by Fusion VC, 43 per cent of respondents cited political and security instability as their top concerns, while 38 per cent emphasized difficulties in raising funds for new VC initiatives.

Furthermore, many investors saw attracting foreign investment amid the ongoing war as a critical issue, scaring off potential international investors.

"There is also concern that the Israeli tech ecosystem is overly concentrated in cybersecurity, with too few resources directed toward consumer-focused companies. This limits the potential for Israel to build large-scale consumer businesses," said Fusion co-founder Guy Katsovich.

In addition to reports, surveys, and discussions with leading investors, the conference also featured a discussion with Danny Gold, head of MAFAT (the Directorate of Defense Research and Development) and developer of Israel's famed Iron Dome.

Israeli defense technologies have proven their worth on multiple occasions over the past year of war, with Israel's air defense and cybersecurity drawing increasing interest from foreign buyers and investors.