Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      MVNO boom is reshaping South Africa’s mobile market

      12 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      South African law is failing gig-economy workers

      12 June 2025

      MultiChoice’s TV empire shrinks – but its ‘side hustles’ are holding strong

      12 June 2025

      MultiChoice is bleeding subscribers

      11 June 2025
    • World

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025

      Mark Zuckerberg has finally found a use for his metaverse

      30 May 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Investment » War threatens funding for Israel’s tech industry

    War threatens funding for Israel’s tech industry

    The conflict with Hamas is set to derail a fragile recovery in Israel's all-important tech sector, say investors and analysts.
    By Agency Staff11 October 2023
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    The spiralling conflict with Hamas is set to derail a fragile recovery in Israel’s all-important tech sector, say investors and analysts, after a global slowdown and the government’s divisive judicial reforms saw funding drop sharply this year.

    Israel, one of the world’s most innovative high-tech economies, relies on the sector for 14% of its workforce and nearly a fifth of its overall economic output. It has weathered decades of turmoil and is ultimately expected to see investment return once the conflict ends and fundraising globally recovers, they added.

    “Overseas investment will slow for the next couple of weeks and months, especially to the extent that there are still hostilities going on,” said Jon Medved, CEO of OurCrowd, one of Israel’s largest venture capital firms. “This is not a particularly easy time to get investment,” he added, noting the number of flights to Israel that have been cancelled.

    Before the conflict, investment in Israel’s high-tech startups had dropped as the global economy slowed

    Israel declared war on the Palestinian militant group Hamas after gunmen on Saturday burst across the fence from Gaza in the deadliest incursion into Israeli territory since Egypt and Syria’s attacks in the Yom Kippur war 50 years ago.

    Israeli media said deaths from the attacks had reached 900, mostly civilians gunned down in homes, while scores of Israelis and some foreigners were taken to Gaza as hostages. Israel has responded with fierce air strikes into the Hamas-ruled Gaza Strip.

    Before the conflict, investment in Israel’s high-tech startups had dropped as the global economy slowed, the collapse of Silicon Valley Bank removed a key funding source, and a proposed judicial overhaul threatened the bedrock of corporate law and intellectual property rights.

    According to the IVC Research Centre and LeumiTech, Israeli high-tech firms saw a 70% fall in fundraising in the first half of the year, but added that the rate had stabilised to a drop of 14% in the third quarter compared with the second.

    Security, AI

    LeumiTech CEO Maya Eisen Zafrir said the figures were “the first signs of stabilisation in the amount and scope of fundraising, data that bring us back to the levels of 2018/2019”.

    In all, start-ups have raised some US$5-billion so far in 2023, versus $16-billion last year and a record $26-billion in 2021. It was $10.4-billion in 2019. Investment has been broad based but led by cybersecurity and artificial intelligence companies.

    “Certainly, while we are in the midst of the war, it’s hard to imagine major deals happening,” said Avi Hasson, CEO of Startup Nation Central and a former venture capitalist. That said, Hasson and others expect Israel’s tech sector to rebound in the same way it has in past conflicts with Palestinian and Hezbollah militants.

    Read: How Hamas outmanoeuvred Israel’s surveillance prowess

    “Israeli tech has earned the confidence of investors in terms of being able to function during conflict and also recover from it,” Hasson said. “So, I don’t see investors losing faith in Israel so quickly.”

    Medved said that he believes that Israel will prevail as an tech investment destination. “Historically, every time Israel has gone to war, long term has been a buy side,” he said.

    With much of the country reeling from the attacks, tech firms have been using their offices to collect supplies for soldiers since many of the 300 000 reservists Israel has called up are tech employees.

    US venture capital fund Insight Partners said it would match up to $1-million in donations to a pre-approved list of charitable organisations in Israel, saying it was a “critical opportunity to stand with our Israeli friends and partners”.

    Gem Security, a cloud security start-up that just raised its series-A funding of $23-million from US investors, has 30 staff split between Israel and New York. It was expanding the team when the conflict broke out and some staff in Israel had to report for reserve duty.

    “What’s happening in Israel, in my perspective, won’t change anything with our plans to stay within Israel when it comes to technology,” said Arie Zilberstein, Gem’s co-founder and CEO.

    Read: Attack on Israel: Musk’s X slammed as ‘platform for hatred’

    Ariel Efergan, vice-president of growth at startup MDI Health, estimated that about a fifth of its 40 employees in Tel Aviv, had been put on reserve duty. The rest are now working remotely.

    Start-up marketing adviser Hillel Fuld was ultimately optimistic about the industry, pointing to a wave of support from the global venture capital community and a shift in world opinion in Israel’s favour. “That shift may even help push those investors who might have been reluctant [to invest in Israel],” he said. “I don’t see this situation affecting Israel in a negative way.  — Steven Scheer, with Krystal Hu, (c) 2023 Reuters

    Get breaking news alerts from TechCentral on WhatsApp



    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleAdobe overhauls Creative Cloud suite for AI era
    Next Article Why WeChat wins (in China)

    Related Posts

    MVNO boom is reshaping South Africa’s mobile market

    12 June 2025

    Building a cyber-resilient culture from the boardroom to the front lines

    12 June 2025

    How South Africa’s municipalities are finally getting smart

    12 June 2025
    Company News

    Building a cyber-resilient culture from the boardroom to the front lines

    12 June 2025

    How South Africa’s municipalities are finally getting smart

    12 June 2025

    Ransomware roulette: pay up or power through?

    11 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.