The second quarter of 2025 is shaping up to be one of the strongest quarters in capital raising for Israeli tech companies in recent years. But estimating exactly how much money was raised depends on who you ask and how you count.
According to the IVC-LeumiTech report for the second quarter, about $2.72 billion was raised in 90 financing rounds, up 20% compared from the preceding quarter. In contrast, Startup Nation Central estimates the total fundraising to be more than double – about $6 billion. The gap between the estimates is not new, and is due to differences in measurement approaches. IVC relies on deals that have actually been reported only, and does not include confidential rounds and those whose details have not yet been published. Startup Nation Central, on the other hand, also incorporates estimates of deals that have not yet been disclosed, alongside information from broader sources. In the current quarter, the gap may be largely due to the inclusion of Safe Superintelligence (SSI) massive round, which reportedly raised $2 billion – a deal that was not included in IVC’s report.
The IVC report was published too soon to include cybersecurity company Cato Networks $359 million financing round, announced today, the final day of the quarter.
However, both reports show a recovery after a prolonged period of declining funding. Startup Nation Central notes that the first half of 2025 was the strongest since the “hype” days of 2021, with total funding of $9.3 billion, a 54% increase over the previous half. However, IVC highlights a decline in the number of rounds, amid a trend of convergence towards follow-on investments in existing portfolio companies.
Despite the differences in numbers, both reports point to the same trend: much of the capital flowed into generative AI, and cybersecurity. According to IVC, 85% of the total capital was invested in 37 rounds in these two areas. There was also a significant strengthening in the defense-tech sector, due to the war and the demand for advanced command and control systems.
The enterprise software sector led in fundraising according to Startup Nation Central, with $3.19 billion in 71 rounds, up 32% from the previous half. The sector includes, among other things, companies that provide software solutions for businesses, such as information management platforms, automation, cloud infrastructures and tools for organizations.
The cybersecurity sector ranked immediately after it with fundraising of $1.98 billion in 56 rounds, followed by the fintech sector with fundraising of $751 million in 29 rounds, including $500 million raised by Rapyd. Also notable are the giant deals by cybersecurity companies Cyera, which raised $540 million, and Island, which raised $250 million, as well as AI company AI21 Labs, which raised $300 million, deals that significantly impacted the data. However, there was an overall fall in the number of new rounds: from 214 in the first quarter to 151 in the second quarter, according to Startup Nation Central.
Significant exits and dominant global investors On tech exits, Startup Nation Central reports there was a historic record in merger and acquisition deals in the first half of 2025, with $39.2 billion, mainly due to Google’s acquisition of Waze for $32 billion.
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Next Insurance was acquired for $2.6 billion and Melio for $2.5 billion, were other notable acquisitions. Outside of acquisitions, eToro’s IPO on Nasdaq, valued at over $5 billion, was also successful, with the company’s stock jumping by more than 30%.
LeumiTech CEO Maya Eisen-Zafrir said, “The technological strength that Israel demonstrated during the operation in Iran, and the signs of positive developments in the region, provide optimism for investors.”
Startup Nation Central CEO Avi Hasson added, “Entrepreneurs continue to build, and investors continue to believe, even in the midst of a complex security reality.”
More data in an encouraging picture
Along with the increase in capital raised, an encouraging trend was seen in the early stages in the second quarter: investments in seed and pre-seed round jumped 50%, to $607 million, although the number of rounds fell from 157 to 150, Startup Nation Central reports. Mid-stage rounds (B and C) saw an even sharper recovery, with a 60% increase in funds raised, from $1.05 billion to $1.68 billion, according to Startup Nation Central. The life sciences sector saw the highest number of rounds, 69, but raised only $623 million, with a median raising of just $2 million.
In addition, Startup Nation Central reported a five-year high in PIPE investments – private investments in public companies, a figure that indicates a return of interest from institutional bodies in Israeli tech, and also in trading on the TASE and not only in private fundraising. According to IVC, in the second quarter, about 190 fundraising rounds were completed, but only 90 of them were publicly reported as of the date of publication of the report. This means that its official figure of $2.72 billion represents only the visible part of the actual quarterly activity.
Published by Globes, Israel business news – en.globes.co.il – on June 30, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
