- Ibex Investors raised a $106 million Israel-only venture fund to back early-stage startups across sectors like AI, cybersecurity, and infrastructure despite ongoing war and political uncertainty.
- OurCrowd launched a $50 million Israel Resilience Fund, first-closing at about $13 million and waiving fees to support startups hit by the conflict.
- Israeli tech funding and valuations rebounded in 2025, but foreign (especially U.S.) investment has fallen sharply and continues to weigh on outlook.
- Investors see counter-cyclical upside from discounted deals and local networks, while war impacts, talent disruption, and policy risk remain key constraints.
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The VC landscape for Israel in late 2024 and into 2025 is defined by a mix of resilience and risk. Major firms like Ibex Investors are making substantial, forward-looking commitments—raising an Israel-focused fund of $106 million dedicated to early-stage startups in sectors stretching from cybersecurity to water tech—even though the country is still deeply affected by war and domestic political turmoil. OurCrowd’s emergency “Israel Resilience Fund” further exposes this contrast: born of crisis, the fund seeks to keep startups afloat by investing in firms directly affected by the war or working on critical wartime technologies.
While there are encouraging signs—investment volumes in 2025 have rebounded with $1.6 to $2.4 billion raised in recent quarters; valuations have materially increased across Series A through D rounds; and a few large exits (or near exits) remain on the table—the decline of foreign investment, especially from U.S.-based funds, raises questions about how much of this strength can be sustained. The risk environment is elevated: investor hesitation is driven by concerns over reservist call-ups affecting teams, diminished stability from judicial reform proposals, and regulatory/policy shifts that may reshape Israel’s risk profile.
Strategically, there is opportunity for those willing to act counter-cyclically. Discounted valuations, government matching programs, and resilient sector verticals (cybersecurity, AI, infrastructure) make Israel an attractive ground for outsized returns—if due diligence accounts for war risk, talent shortages, and liquidity constraints. Funds with local presence, strong networks, and operational flexibility are poised to fare better. But open questions remain about how foreign capital trends will evolve and whether policy risk will undercut confidence over the medium term.
Supporting Notes
- Ibex Investors raised $106 million for a fund dedicated to Israeli early-stage startups, planning ~15 new investments in sectors including infrastructure, cybersecurity, development tools, and insuretech.
- Ibex has been active in Israel since 2012; its Israel fund is open-ended, and since inception it has delivered ~20% compounded annual returns.
- OurCrowd’s Israel Resilience Fund, announced in late 2023, raised more than $13 million in its first close, with about 8 startups already earmarked for funding.
- OurCrowd waived all management fees and carried interest for the duration of the emergency fund in response to wartime crisis.
- In Q3 2025 approximately $1.6 billion flowed into Israeli startups via about 49 deals; this was a recovery relative to the low followed earlier in the year.
- Valuations in Israeli Series A through D rounds rose by 43%, 35%, 29%, and 36% respectively between 2023 and 2025.
- U.S.-based venture funds’ deployment into Israel dropped markedly in 2024; foreign investment proportions in the Israeli tech sector remained high (~80%) but actual dollar amounts from U.S. sources declined.
- Investors cite political and war-related risks—employees being called to reserve duty, judicial reform proposals etc.—as dampening factors.