The third quarter of 2025 was uncommon for the Israeli tech ecosystem. On the one hand, there was an unprecedented peak within the wave of mergers and acquisitions, with offers that place Israel on the heart of the worldwide tech map, whereas alternatively, there was a constant decline within the quantity of personal capital raisings and the variety of finance rounds, which illustrates the growing selectivity of traders. That is in line with two stories printed at the moment by Startup Nation Central (SNC) and IVC-LeumiTech.
The stories present a market in transition, by which large cash flows primarily to mature and progress corporations, whereas early-stage corporations should combat for the eye of traders. In response to SNC information, mergers and acquisitions offers totaling $31.8 billion had been signed in July-September. Probably the most notable deal within the present quarter was the acquisition of CyberArk by Palo Alto Networks for $25 billion, the second largest within the historical past of Israeli tech. Alongside it, the acquisition of Verint Methods was recorded for about $2 billion.
For the reason that begin of 2025, the quantity of M&A transactions has reached $71 billion, virtually 5 occasions the corresponding interval in 2024, on account of different big offers corresponding to Google’s acquisition of Waze for $32 billion – the largest-ever exit in Israeli historical past.
Much less offers, greater financing rounds
Out of the general quantity of mergers and acquisitions, exits totalled $41 billion, 3 times the degrees recorded final yr. Right here too, the cybersecurity trade stood out, contributing 58% of the whole worth of the offers, together with Purpose Safety, which was acquired for $350 million, Findings, which was acquired for $305 million, and Immediate Safety, which was acquired for $275 million.
In parallel with the wave of exits, the info from each stories point out a seamless slowdown in personal capital elevating. In response to SNC, within the third quarter, roughly $2.4 billion was raised, down 38% from the previous quarter (excluding a $2 billion financing spherical by Protected Superintelligence) and down 18% from the corresponding quarter final yr. The variety of recognized rounds fell to 141 – the bottom since 2020.
Nonetheless, along with the decline within the variety of offers, the median financing spherical dimension reached a file of $10.5-12.3 million. It is a sharp improve of fifty%-76% in comparison with final yr, indicating a transparent pattern: fewer rounds, however every profitable spherical attracts extra money.
The information from IVC-LeumiTech are related: $2.23 billion in 116 recognized rounds, and an estimate of 204 rounds in complete, which is a decline of 24% from the identical interval final yr. Nonetheless, when excluding distinctive rounds of over $200 million, a extra optimistic image emerges: a rise of about 20% in contrast with the second quarter of this yr and about 50% in contrast with the corresponding quarter in 2024, and the best quantity of fundraising because the starting of 2023.
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The main sectors had been the identical in each stories – cybersecurity and AI, which collectively raked in near 60% of the capital within the quarter, with notable fundraising rounds. For instance, Aidoc raised $110 million and Decart raised $100 million.
Buyers, for his or her half, have gotten extra discerning: In response to SNC information, the variety of energetic traders has dropped to simply 230, the bottom because the begin of 2024, though you will need to word that greater than half of them are international traders. SNC CEO Avi Hasson summed it up as a “market in transition,” the place funding is slowing however M&A is breaking information. Alternatively, LeumiTech CEO Maya Eisen Zafrir careworn the soundness over the previous two years and the highly effective penetration of Israeli AI corporations into the “international area.”
Backside line: Israeli tech within the third quarter presents a stark contradiction – a historic wave of exits in big offers, towards a slowdown in personal capital elevating. The important thing query heading into 2026 is whether or not the large cash flowing out in exits will return to younger corporations, or whether or not the market will proceed to focus on a minority of enormous offers and solely mature corporations, which function primarily within the cybersecurity and AI industries.
Revealed by Globes, Israel enterprise information – en.globes.co.il – on September 30, 2025.
© Copyright of Globes Writer Itonut (1983) Ltd., 2025.
