The first half of 2025 has been a defining period for the Israeli tech ecosystem, shaped by global uncertainty and grounded by local resilience. While international markets reacted to new tariffs from the Trump Administration and broader economic instability, Israeli startups stayed focused and continued to deliver.
A clear highlight was eToro’s IPO, a major moment for Israeli fintech and a rare public offering in today’s environment. This achievement places eToro alongside Mobileye and monday.com as companies that have helped position Israel as a hub for global tech innovation.
Despite the war with Iran, the Tel Aviv Stock Exchange rose significantly both during and after the conflict. This surprising trend may reflect a deeper shift in sentiment and a renewed belief in the region’s long-term potential.
On the ground, startups are adapting quickly. AI is becoming a core driver of capital efficiency, helping founders build and iterate faster with leaner teams. The role of the developer is shifting, with an emphasis on smart AI integration rather than traditional coding strength. Companies like Base44 are proving that even small teams can move quickly and build impactful products.
Investor sentiment has improved compared to last year. While we are not seeing the exuberance of 2021, there is a growing appetite for top-performing companies, particularly in cybersecurity and defense. Early-stage startups without product-market fit still face challenges, and fundraising remains difficult for many. Venture funds are also navigating a more complex environment, shaped by high interest rates, limited exits, and the valuation correction of recent years.
The ecosystem continues to benefit from the presence of global players. Companies like Wix and monday.com, along with international leaders such as Google, are active in acquiring innovative startups. In many cases, the focus is on talent. Cyber and AI specialists are in such high demand that acquihires are becoming increasingly common.
For entrepreneurs, this is a time that calls for clear execution and strategic focus. Capital efficiency, fast iteration, and strong customer feedback loops are essential. Partnering with established tech companies as design partners can provide valuable insights and accelerate growth.
For global investors, Israel remains an attractive market. However, success depends on working with experienced local partners who understand the ecosystem’s complexity and dynamics. Investing alongside trusted funds with local presence is often the most effective way to access the best opportunities.
The Israeli tech sector continues to prove its ability to build category-leading global companies. Despite ongoing geopolitical challenges, founders remain focused on international markets, and investor interest is steadily rising. For those with available capital, the opportunity has never been clearer.
