Inside the Numbers: Israeli Innovation Powers Through with $1.8 Billion Invested

The Israeli tech sector stands resilient amidst turmoil, presenting a golden opportunity for savvy investors. Despite the horrors of October 7th, when Iran launched around 170 drones, over 30 cruise missiles, and more than 120 ballistic missiles at Israel, the nation's innovative prowess shone through, successfully defending against 99% of the attacks – a feat unparalleled in modern warfare.

The numbers don't lie – Israeli tech keeps pushing forward. In Q1 2024, private funding hit $1.8 billion across 114 investment rounds, a 9% jump from the previous quarter. This increase was driven by larger average deal sizes, despite fewer total rounds. And the figures could reach even higher, with projections of $2.3 billion invested over more than 140 rounds after accounting for undisclosed amounts.

Cybersecurity emerged as the star, capturing the spotlight with 4 out of the 6 mega-rounds (deals over $100 million) that totaled a massive $846 million. That's nearly 50% of all ecosystem funding for the quarter. The cybersecurity dominance extended to exits too, with the sector accounting for half of the top 6 largest acquisitions. This surge is fueled by more investor-friendly valuations and insatiable market demand from buyers.

What make this an opportunity for family offices?

The prevailing circumstances have inadvertently leveled the playing field, presenting a unique window for nimble, forward-thinking investors. As some of the global investment giants temporarily scale back their Israeli focus, a void has emerged – one ripe with prospects for smaller players like single-family offices, multi-family offices, and angel investors. This dynamic has effectively reduced competition, allowing these more agile investors to capitalize on promising deals that may have previously been overshadowed. In the latest episode of Extraordinary Talks, Marcello Tedeschi , Managing Director at Alchimia Investments , an Italian VC firm, echoed this sentiment:

"It's very interesting right now from an international standpoint to see that as there is less competition to come in, there is more opportunity to come to Israel and invest....Despite the challenges, I truly believe that it's a great moment to invest in Israel from a financial perspective."

Listen to the full episode here:

?? Spotify | ? Podcasts | ?? YouTube

Moreover, the resilient Israeli entrepreneurial spirit has historically thrived in the face of adversity, with necessity breeding innovation. Numerous unicorn success stories have stemmed from challenging periods, underscoring the immense potential that lies within the nation's tech ecosystem. Savvy investors recognize this pattern and the current juncture as an opportune time to tap into the wellspring of Israeli ingenuity. By backing the nation's exceptional founders, they stand to secure early equity in the next generation of category-defining companies – all at a compelling valuation entry point.

We invite you to learn more about TechShield

When we designed TechShield, we had the investors in mind, we know what we would want to have in this kind of opportunity, and we do the hard work, so specific investors would be able to reap the rewards and get a great deal.

How it works:

1. We curate: Our experts select the best VC-backed Israeli startups.
2. You invest with confidence: Reduced risk, clear-eyed opportunities.
3. Win big: Access to a thriving ecosystem and top talent at decent price.

There are still few more spots on this TechShield 'Reverse Fund'.

We're looking for smart money - are you interested?

Submit your info in this form - if it'll be relevant our Investor Relations team would contact you.

For investors seeking early equity in category-defining companies at compelling valuations, the resilient Israeli ecosystem presents an unmissable opportunity. Those companies critical for Israel's high-tech diversity face some funding challenges – and that's exactly the gap shrewd investors can fill.

Feel free to share it with people that might find it relevant.

Warm regards,

Philippe Bouaziz , Toot Shani , David Debash , Morris Levy , Lana Shapiro , Daniela Weinsweig , Alana Rubin , Shai Goel , Erik Cohen

The Sarona Ventures Team