Q1 2026 REPORT
Israeli Tech Ecosystem
April 30, 2026
Editors: Yariv Lotan, VP of Product and Data; Einat Ben Ari, Senior Director Data and Insights, Startup Nation Central.
Data analysis and insights: Tal Sibony, Senior Manager Analytics and BI; Ahmad Sarsor, BI Developer; Deema Wattad, BI Developer, Startup Nation Central.

Foreword

Introduction
AS
Aviva Steinberger
Interim CEO, Startup Nation Central  ·  April 2026

This quarter's Finder report arrives at a moment of transition—for Startup Nation Central and for Finder itself.

Over the past months, we have taken meaningful steps to refocus our organization, sharpening our priorities to ensure long-term impact for Israel's innovation ecosystem. As part of this process, we are also taking a close look at how Finder continues to serve the ecosystem—how it evolves, where it adds the most value, and how it should look in the future.

What has not changed is our commitment to the role that high-quality, accessible data plays in strengthening the tech sector. Finder has long been a cornerstone of that mission—providing a trusted, comprehensive view of the ecosystem and enabling better decisions across founders, investors, policymakers, and global partners.

This report may feel somewhat different from previous editions. It reflects both the current moment and the broader shifts taking place across the ecosystem. At the same time, it maintains the rigor, integrity, and depth of data that have defined Finder from the start.

Whether in its current form or through its next evolution, the need for clear, reliable insights into the Israeli tech landscape remains as critical as ever. This report offers a grounded snapshot of where things stand today—an anchor point as we look ahead.

Executive Summary

Q1 2026
YL
Yariv Lotan
VP of Digital Products, Development, Data & Insights, Startup Nation Central
A Quarter of Concentration and Conviction

Q1 2026 sent a clear structural signal: capital is concentrating, investor conviction is deepening, and Israel's tech sector is growing more selective — not less competitive. Deal volumes have contracted sharply, but the dollars follow quality. That divergence defines the quarter.

Private Funding: Fewer Deals, Larger Bets
  • $4.3B total private funding (reported & estimated) — up 18.4% YoY vs. Q1 2025, despite an 8.5% sequential dip from Q4 2025
  • 137 (reported & estimated) deals closed — the lowest quarterly count since 2018, down 47.1% YoY
  • 11 mega rounds (≥$100M) totaling $1.9B — 52.8% of all capital deployed
  • Headline raises: VAST Data ($400M), Upwind Security ($250M), Fundamental ($225M, new unicorn at $1.2B valuation)
  • The market is not retreating — it is consolidating around proven, category-defining companies
Sector Dynamics: Software and Cyber Command the Capital
  • Business Software + Cybersecurity: $3.2B across 77 rounds — 87% of total disclosed capital
  • Health Tech: 20 rounds but a median of just $6M per deal, reflecting its earlier-stage profile
  • Industrial Technologies: meaningful activity signals that investor appetite is broadening beyond the traditional top two sectors
M&A: Strong Exit Volume, Mid-Market Depth
  • $5.7B total M&A value across 38 deals — a 51% YoY increase on an adjusted basis (excl. Q1 2025's Wiz and CyberArk outliers)
  • Largest deal: Apple's $1.5B acquisition of Q.AI, affirming global appetite for Israeli AI-driven enterprise solutions
  • Other top deals: Mentee Robotics ($900M), CathWorks ($585M), plus multiple cybersecurity exits
  • Exit activity spans sectors — a sign of ecosystem breadth, not just depth in one domain
Public Markets: PIPE-Dominated, IPO Window Closed
  • $0.58B raised across 16 events, dominated by PIPE transactions — 13 deals totalling $514M
  • Compared to $926M in Q4 2025, the contraction is stark
  • Smart Shooter's $65M IPO on TASE was the only IPO; zero traditional Public Offerings
  • The IPO window remains effectively closed for Israeli tech companies
  • The IPO window remains shut; mid-market M&A is the dominant exit route until conditions change
Investor Dynamics: Fewer, but More Committed
  • 246 active investors — lowest since 2023, down 13% QoQ and 28% YoY
  • Global investors: 63% of the active base; 74% of all rounds included at least one international participant (up from 56% in Q1 2025)
  • Fewer investors, but deeper engagement — global capital is not stepping back, it is stepping up on selected opportunities
Looking Ahead: Q2 2026 and Beyond
  • Macro pressure: Global trade tensions and public market volatility could slow VC momentum in H2 2026
  • Early-stage attrition: Declining seed and Series A deal counts are a medium-term pipeline risk
  • Defense tailwind: Cybersecurity and dual-use tech will continue attracting capital — a structural advantage shaped by Israel's unique geopolitical context
  • Public markets: A meaningful IPO rebound requires lower rates, improved company financials, and renewed market appetite
  • Employment watch: Updated CBS data for H2 2025 will reveal whether the sector's productivity gains are holding
The bottom line: Israel's tech ecosystem is not in retreat. It is in a phase of deliberate concentration — high-quality companies are commanding global capital on strong terms, even as the broader funding environment narrows. The test for the remainder of 2026 is whether early-stage deal flow recovers enough to sustain the pipeline that feeds the next cycle.

Yariv Lotan, VP of Digital Products, Development, Data & Insights, Startup Nation Central
Chapter 1

Private Funding

In Q1 2026, the Israeli tech ecosystem saw a total private funding volume (reported & estimated) of $4.3B, representing a decline of 8.5% compared to Q4 2025 ($4.7B). Compared to Q1 2025 ($3.6B), capital volume grew by 18.4%. Deal count fell to 137 — a 14.9% drop from Q4 2025 and a 46.7% decrease from Q1 2025 — signaling a continued trend of capital concentration in higher-value rounds despite a shrinking overall deal volume. This resilience in total funding, driven by high-conviction late-stage investments, highlights the stability of mature Israeli companies amidst the regional conflict.

$4.3B
Total Funding (reported & estimated) Q1 2026
−8.5% vs Q4 2025
137
Reported & Estimated Deals Closed
−14.9% vs Q4 2025
+18.4%
YoY Capital Growth
vs Q1 2025 ($3.6B)
−46.7%
YoY Deal Count
vs Q1 2025 (257 deals)

Funding Volume & Deal Count Trends

2018 Q1 – 2026 Q1

Total private funding peaked in 2021 before entering a sustained correction, with volume recovering in 2025 driven by high-conviction late-stage investments. Round counts have contracted more sharply than capital, underscoring growing concentration among fewer, larger deals.

Total Private Funding per Quarter ($B)
Stacked by measurement type · 2018 Q1 – 2026 Q1
Private Funding (Known)
Estimation – Undisclosed Amount
Estimation – Unreported
Q1 2026 snapshot: With $3.68B in known private funding and $580M in estimated undisclosed/unreported amounts, total Q1 2026 capital reaches ~$4.3B — marking the highest Q1 since 2022 on an adjusted basis.

Top Funding Rounds — Q1 2026

By Amount

The quarter's activity was anchored by massive rounds from established leaders, with Business Software and Cybersecurity remaining the dominant sectors. VAST Data secured a $400M F Round, Upwind Security raised $250M in a Series B, and Fundamental's outstanding $225M A(!) Round turned it into a unicorn with a $1.2B valuation. The presence of multiple nine-figure rounds signals that the Israeli ecosystem continues to produce global category leaders capable of attracting significant early and late-stage capital.

Top 10 Private Funding Rounds

Q1 2026 · Ranked by disclosed amount

# Company Sector Round Amount

Mega Rounds

≥ $100M rounds
Mega rounds in Q1 2026 reached 11 events totalling $1.9B, representing 52.8% of total quarterly funding. This maintains a trend seen in the latter half of 2025 where mega rounds accounted for over 60% of total capital, signalling continued concentration of capital in the highest-conviction opportunities.
Amount of Mega Rounds ($B)
Rounds ≥ $100M · 2018 Q1 – 2026 Q1
Mega Rounds (≥ $100M)

Mega Rounds: Share of Total Private Funding

% of quarterly capital

Mega rounds have consistently dominated quarterly funding since 2021, with their share rebounding above 50% in Q1 2026 after a dip in Q3 2025. This reinforces the structural shift toward fewer, larger bets in the Israeli ecosystem.

Mega Rounds vs Other Rounds — Share of Total Funding (%)
2018 Q1 – 2026 Q1 · Stacked 100%
Mega Rounds
Other Rounds
Q1 2026: With 11 mega rounds totalling $1.9B (52.8% of total funding), the quarter continues the high-concentration trend of H2 2025. The sustained dominance of mega rounds — now above 50% for the fourth of the last five quarters — reflects investor preference for proven, later-stage Israeli companies amid a selective capital environment.

Sector Analysis

Q1 2026

Health Tech & Life Sciences and Business Software lead the Israeli ecosystem in total active companies, together accounting for over 3,200 active entities. Cyber Security, despite ranking fifth in company count, dominates Q1 2026 funding activity — reflecting its outsized deal size relative to ecosystem presence.

Active Companies by Sector
Total active companies in the Israeli ecosystem · Q1 2026

Business Software and Cyber Security dominated Q1 2026 funding activity, together attracting $3.2B across 77 rounds — 87% of total disclosed capital. Health Tech ranked third by round count (20) but with a significantly lower median round size of $6M, reflecting the sector's earlier-stage profile compared to software and cyber.

Funding Amount by Sector ($M)
Total disclosed capital · Q1 2026
Chapter 2

Public Funding Trends

The public markets for Israeli tech companies showed a sharp contraction in Q1 2026. Deal volume fell to 16 events, a 20% decline compared to Q4 2025 (20 events). Total capital raised reached $578M, driven primarily by PIPE transactions ($514M across 13 deals). The only IPO of the quarter was Smart Shooter's $65M listing on TASE.

$578M
Capital Raised
Q1 2026
16
Events
−20% vs Q4 2025
$514M
PIPE Transactions
13 deals · 89% of total
$65M
Smart Shooter IPO
Only IPO of the quarter

Public Funding Amounts & Event Count

2018 Q1 – 2026 Q1

Public market activity surged in 2020–2021 driven by SPACs and large IPOs before falling sharply. Q1 2026 public market activity was dominated by PIPE transactions — 13 deals totalling $514M, representing 89% of total capital raised. The quarter's only IPO was Smart Shooter's $65M listing on TASE. With zero traditional Public Offerings, the IPO window remains effectively closed for Israeli tech companies, reflecting a cautious approach by investors amid broader macroeconomic uncertainties.

Public Funding Amount by Type ($B)
2018 Q1 – 2026 Q1
Initial Public Offering
Public Offering
PIPE

Notable Public Companies

By Market Cap

Leading Israeli tech companies listed on public markets, ranked by market capitalisation. Source: Finder Data and PitchBook.

Top Israeli Public Tech Companies

Tracked on Finder · Q1 2026

# Company Exchange Market Cap P/E Israeli Employees
1
Elbit Systems
NASDAQ $38.8B 58.65 7.6K
2
Teva Pharmaceuticals
TASE, NYSE $34.0B 52.05 30.0K
3
Tower Semiconductor
TASE, NASDAQ $19.1B 67.84 1.5K
4
Check Point Software
NASDAQ $15.2B 20.37 8.4K
5
Nova
NASDAQ, TASE $14.2B 42.65 1.7K
6
DRS RADA Technologies
TASE, NASDAQ $12.2B 34.43 0.8K
7
NextVision Stabilized Systems
TASE $8.9B 61.76 0.2K
8
Camtek
TASE, NASDAQ $7.4B 107.42 0.7K
9
Amdocs
NASDAQ $7.0B 15.94 35.5K
10
ICL
NYSE, TASE $6.6B 19.86 3.6K
11
NICE
NASDAQ, TASE $6.5B 12.77 13.5K
12
Mobileye Global
NYSE, NASDAQ $6.2B — 3.8K
13
JFrog
NASDAQ $5.8B — 2.3K
14
Wix.com
NASDAQ $5.3B 44.02 7.7K
15
Global-e Online
NASDAQ $5.2B 982.75 1.2K
16
Monday.com
NASDAQ $3.5B 119.97 3.5K
17
SolarEdge Technologies
NASDAQ $3.1B — 3.1K
18
Varonis
NASDAQ $2.6B — 2.8K
19
Nayax
TASE, NASDAQ $2.1B 80.21 0.8K
Chapter 3

M&A Trends

In Q1 2026, Israel's M&A market reached $5.7B across 38 deals. On an adjusted basis — excluding the Wiz and CyberArk outliers — Q1 2026 demonstrates a robust 51% increase in transaction value compared to $3.7B in Q1 2025. The largest deal was the $1.5B acquisition of Q.AI by Apple, followed by Mentee Robotics ($900M) and CathWorks ($585M).

$5.7B
Total M&A Value
Q1 2026
38
Deals Closed
−12% vs Q4 2025
+51%
YoY Growth (adj.)
vs Q1 2025 excl. outliers
$1.5B
Largest Deal
Q.AI → Apple

M&A Volume & Deal Count

2018 Q1 – 2026 Q1

In Q1 2026, Israel's M&A market reached a total of $5.7B across 38 recorded deals. On an adjusted basis — excluding the Wiz and CyberArk outliers — Q1 2026 ($5.7B) demonstrates a robust 51% increase in transaction value compared to the $3.7B recorded in the same period last year. However, the market has cooled since the immediate prior quarter (Q4 2025), which saw $11.3B in activity — a 50% decrease in total value and a 19% dip in deal count quarter-over-quarter. The exit environment remains healthy with 38 events, signaling continued ecosystem maturity. This shift toward more frequent mid-market deals suggests a stabilisation of the market, where acquirers are focusing on strategic technological integration over the massive consolidation events that dominated 2025.

M&A Trends Q1 2026 (Including Outliers)
Bars = transaction value ($B, left axis) · Line = deal count (right axis)
Transaction Value ($B)
Deal Count (line)

Top M&A Deals — Q1 2026

By Acquisition Amount

The largest deal of the quarter was the $1.5B acquisition of Q.AI by Apple in the Business Software sector, indicating a strong appetite for AI-driven enterprise solutions. Other significant transactions included Mentee Robotics ($900M) in Industrial Technologies and CathWorks ($585M) in Health Tech & Life Sciences. Remaining top deals were distributed across Cyber Security, with companies like Seraphic Security and Koi fetching substantial sums. The sectoral diversity among these top deals signals that Israel remains a vital global source for high-value innovation across multiple technological domains, maintaining strong international interest even as the capital environment becomes more selective.

Notable M&A Deals

Q1 2026 · Ranked by acquisition amount

# Company Sector Acquirer Amount
Chapter 4

Investor Trends

In Q1 2026, the number of active investors in the Israeli tech ecosystem totalled 227, representing a ~20% contraction from the 282 investors active in Q4 2025 — one of the lowest participation levels since 2023. Compared to Q1 2025, when 310 investors were active, the total count has decreased by 27% year-over-year. Global investor participation fell to 140 active firms, down 19% from the previous quarter, while local investors decreased to 87, a 21% drop from Q4 2025. Despite the overall decrease, global investors maintained a dominant share, accounting for 62% of the total active investor base, up from 56% in Q1 2025.

227
Active Investors
−20% vs Q4 2025
140
Global Investors
62% of total
87
Local Investors
−21% vs Q4 2025
76%
Global Round Participation
of 104 total rounds

Active Investors & Global Participation in Rounds

2018 Q1 – 2026 Q1

In Q1 2026, the number of active investors in the Israeli tech ecosystem totalled 227, representing a ~20% contraction from the 282 investors active in Q4 2025. This quarterly decline marks one of the lowest participation levels since 2023, reflecting a more cautious investment climate. Compared to Q1 2025, when 310 investors were active, the total investor count has decreased by 27% year-over-year. This contraction reflects a continued shift toward higher-value focus and increased selectivity in a tighter capital environment.

In Q1 2026, total investment rounds stood at 104, with global participation reaching a high of 76%. This represents an increase from the 67% global involvement seen in Q4 2025 and a significant rise from the 56% recorded in Q1 2025. The data suggests two parallel trends: while the overall number of active investors and investment rounds is contracting, the relative share and influence of international capital in the rounds that do close are increasing. This indicates that global investors remain highly engaged in the Israeli market, focusing their capital on higher-conviction opportunities despite broader macroeconomic headwinds.

Active Investors: Israeli vs. Global Split
Stacked count of active investors per quarter
Global Investors
Local Investors
Two parallel trends: While total active investor numbers contract — now at 227, their lowest since 2023 — global investors are claiming a greater share of both the active base (62%) and round participation (76% of 104 rounds). This divergence underscores that international capital is not retreating from Israel; it is simply becoming more selective, concentrating on fewer, larger, and higher-quality opportunities.

Notable Investors

Q1 2026

Leading Local Investors

Israeli VCs · Q1 2026 · New = first-time investments

# Investor Total Rounds New
1
CyberStarts
6
 1
2
Team8
5
 2
3
Peregrine Ventures
4
 1
4
Glilot Capital Partners
4
 2
5
StageOne Ventures
4
 1
6
Fresh Fund
4
 3
7
TLV Partners
4
 1
8
Viola Ventures
3
 3
9
Grove Ventures
3
 2
10
S Ventures
3
 3

Leading Global Investors

International VCs · Q1 2026 · New = first-time investments

# Investor Total Rounds New
1
Insight Partners
8
 4
2
Bessemer Venture Partners
7
 3
3
Merlin Ventures
6
 4
4
Norwest Venture Partners
6
 5
5
Index Ventures
5
 1
6
Lightspeed Venture Partners
3
 1
7
Square Peg
3
 1
8
Salesforce Ventures
3
 2
9
Alumni Ventures
3
 3
10
Vine Ventures
3
 1
Closing

Summary, Methodology & About Us

Summary

Q1 2026

Q1 2026 delivered a clear-eyed picture of an ecosystem in structural transition. Total private funding reached $4.3 billion — an 18.4% increase year-over-year — driven by eleven mega rounds that collectively accounted for more than half of all capital deployed. Deal count contracted sharply to 137, the lowest quarterly figure since 2018, reflecting a deliberate shift toward fewer, larger investments in companies with proven fundamentals. Business Software and Cybersecurity dominated activity, together capturing 87% of disclosed capital, while sectors such as Health Tech and Industrial Technologies maintained steady early-stage momentum.

M&A activity held firm. With $5.7 billion across 38 transactions, and a 51% year-over-year increase on an adjusted basis, the exit environment confirmed that global strategic buyers — from Apple to major healthcare acquirers — continue to actively seek Israeli innovation. Public markets, by contrast, were largPIPE-dominated: $578M raised across 16 events, with 13 PIPE transactions accounting for $514M (89% of capital). Smart Shooter's $65M IPO on TASE was the only IPO of the quarter.

Investor participation narrowed, with 246 active investors representing the lowest level since 2023. However, global investor engagement in actual rounds increased to 74% — a record high — signaling that international capital is not withdrawing but becoming more targeted.

Macroeconomic Volatility

Global trade tensions, potential recession signals in key markets, and uncertain monetary policy trajectories will weigh on investor risk appetite. A sustained downturn in public capital markets could dampen private funding momentum in H2 2026.

Capital Concentration and Early-Stage Attrition

The declining deal count at early-stage levels is a medium-term concern. With the pipeline of future scale-ups dependent on today's seed and Series A activity, a continued contraction in early-stage deal flow could reduce the ecosystem's output of new high-value companies by 2027–2028.

Defense Technology Expansion

Cybersecurity and defense-adjacent technologies are expected to remain primary capital attractors, sustained by ongoing geopolitical demand and growing VC interest in dual-use innovation. This represents a structural competitive advantage for Israel in an increasingly security-conscious global environment.

Public Market Recovery

The conditions for a meaningful IPO rebound — lower interest rates, improved company revenue visibility, and renewed investor appetite for growth — have not yet materialized. Mid-market M&A is likely to remain the primary exit pathway through 2026.

Bottom line: Q1 2026 confirms the Israeli tech ecosystem's capacity to generate value under pressure. The challenge for the quarters ahead is whether the pipeline of emerging companies — essential for sustaining the ecosystem's long-term productivity — is being adequately nourished in a concentrated, late-stage capital environment.

Methodology Notes

Data & Definitions

Data Sources

This report is based primarily on the Startup Nation Finder database, with the following exceptions:

  • Notable Public Companies list is sourced from PitchBook

Report Scope and Snapshot Date

The report offers a snapshot of Q1 2026 activity as of March 31, 2026. Data may be further updated as additional rounds are reported or disclosed retroactively. Figures may differ from prior or subsequent published reports.

Definitions and Criteria

  • Active Investors are defined as investors with at least one recorded investment round in Q1 2026
  • Mega Rounds are defined as funding rounds of $100 million or more
  • Aggregate funding metrics may include rounds not visible on Finder profiles, per the request of profile owners

Funding Type Definitions

Private Funding includes: Pre-Seed, Seed, Series A–G, Convertible Debt, SAFE, Equity Crowdfunding, and Undisclosed rounds.

Public Company Funding includes: Initial Public Offering (including via SPAC or Reverse Merger), Non-Initial Public Offering, and PIPE (Private Investment in Public Equity).

Excluded from all funding figures: Crowdfunding, Debt Financing, Secondary transactions, and Grants.

Estimation Methodology

Total funding figures include three components: (1) known and disclosed amounts as reported in Finder; (2) estimated amounts for rounds where a value was not publicly disclosed, based on Finder's proprietary estimation model; and (3) estimated amounts for rounds not yet reported in the database as of the snapshot date.

About Us

Startup Nation Central

Startup Nation Central

Startup Nation Central (SNC) is a nonprofit organization dedicated to connecting the world to Israeli innovation. SNC serves as the bridge between the Israeli tech ecosystem and global investors, corporations, and governments — enabling partnerships that drive impact.

SNC operates Startup Nation Finder, the most comprehensive database of the Israeli tech ecosystem, tracking companies, investors, and ecosystem activity in real time.

startupnationcentral.org

Startup Nation Finder

Finder is the data intelligence platform powering this report. It tracks thousands of Israeli tech companies, investors, and ecosystem events — providing real-time data on funding rounds, M&A activity, public market performance, and more.

Finder is used by leading investors, multinationals, and policymakers worldwide to navigate and engage with the Israeli tech ecosystem.

finder.startupnationcentral.org