This sharp decline, compared to the previous year, indicates the significant impact of the war on one of the country’s most vital industries Israel.
decrease in Investments It was particularly evident in 2024, when the ten largest investments accounted for nearly 50 percent of total investments compared to less than 25 percent in previous years.
Also, 76 percent of the companies that raised significant funds were headquartered abroad, underscoring the shift of power beyond Israeli borders.
Despite the sector’s attempts to maintain stability, the war has severely limited its ability to attract foreign capital, with many investors reluctant to deal with the Israeli market, due to the high risks.
The report also highlighted Israel’s declining standing in the race artificial intelligence Globally, the country fell from seventh to ninth place in the “Tortoise Media“International Artificial Intelligence, a notable drop from its fifth-place ranking in 2021.
The nature and long duration of the war has also complicated the ability of Israeli startups to raise money, with half of the companies that received seed funding in 2022 struggling to move to Series A funding.
Despite the general economic slowdown, Israel’s high-tech defense sector saw an increase in demand during the war, driven by global tensions, such as the ongoing Russian-Ukrainian conflict and growing competition between China and the United States.
It saw Israel’s defense giants, including “Elbit Systems“, and”Raphael“, and”Israeli Aerospace Industries (IAI) grew significantly, with Rafael’s sales growing by 32 percent during the war.
However, investors’ reluctance to hold shares in defense companies has led to a decline in their market value.
This rise in defense demand has also presented opportunities for about 150 Israeli defense technology startups, although many face challenges such as limited access to venture capital.
The war particularly affected the northern and southern regions of Israel, as approximately 150 high-tech companies operate in these border areas, representing less than 2 percent of the country’s high-tech companies.
