Edited by: TJVNews.com

Israeli tech startups continue to demonstrate formidable resilience amid a global investment downturn, raising a total of $3.15 billion in the first five months of 2025, according to data reported by Globes and  covered by The Jewish News Syndicate (JNS). Although the pace of capital influx is slower than in previous boom years, Israel’s innovation economy—long known as the “Startup Nation”—remains a formidable magnet for investors, especially in strategic sectors such as artificial intelligence, cybersecurity, and quantum computing.

According to JNS, May 2025 alone saw Israeli startups secure $550 million in venture capital. While impressive by global standards, this figure marks a notable decline from the more than $1.4 billion raised in May 2024, a month that was heavily boosted by cybersecurity powerhouse Wiz’s groundbreaking $1 billion fundraising round.

As JNS reported, seven key companies were responsible for more than 85% of the total funding raised in May, reflecting a growing trend toward consolidation of investment in later-stage, high-visibility ventures. These standout funding rounds include:

AI21 Labs, an advanced AI research firm, which raised a staggering $300 million in Series D funding.

Classiq, a pioneer in quantum software development, secured $110 million in Series C financing.

Orca AI, a maritime technology startup specializing in autonomous navigation and vessel safety, pulled in $72.5 million.

Empathy, a platform offering grief and bereavement support services, raised $72 million.

Ox Security, a next-generation cybersecurity firm, attracted $60 million.

Kela, a cyber intelligence company, also secured $60 million.

PhaseV, a company innovating in process optimization for industrial AI applications, received $50 million.

These deals, as noted in the JNS report, highlight the continued investor appetite for advanced technologies with real-world, scalable applications. The dominance of AI-related and cybersecurity-focused firms underscores a broader global trend of prioritizing digital infrastructure, national security, and automation.

Though May’s figures represent a month-over-month decline, the JNS report emphasized that the cumulative $3.15 billion raised through May points to Israel’s enduring appeal in the global tech investment landscape. However, analysts caution that if the current pace continues, the total capital raised in 2025 may fall short of last year’s already reduced $9.58 billion—a figure that itself marked a decline from $15 billion in 2022 and a dramatic plunge from the record-setting $25.6 billion peak in 2021.

The JNS report explained that the contraction reflects a larger global retrenchment among venture capitalists, driven by inflationary pressures, higher interest rates, geopolitical instability, and lingering uncertainty in the post-pandemic macroeconomic environment. Still, Israel’s numbers are far from bleak.

“In contrast to the widespread pullback elsewhere, Israel’s ability to raise over $3 billion in just five months is a sign of remarkable sectoral durability,” a venture analyst quoted by JNS observed.

The thematic concentration of 2025’s investment activity, as detailed by JNS, reveals a strategic focus on areas with long-term global importance. AI21 Labs’ massive funding round not only confirms the centrality of artificial intelligence in Israel’s tech landscape but also suggests confidence in the country’s homegrown alternatives to U.S.-based AI giants.

Meanwhile, Classiq’s success in securing quantum computing funds points to Israel’s ambition to lead in next-generation computing infrastructure. Quantum software is an area of increasing importance for both economic and national security, and Israel’s investment here signals its intention to stay ahead of adversarial technologies emerging from China, Russia, and Iran.