Exits soar whereas fund elevating falls
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 middle of the worldwide tech map, whereas then again, there was a constant decline within the quantity of personal capital raisings and the variety of finance rounds, which illustrates the rising selectivity of buyers. That is in keeping with two studies printed immediately by Startup Nation Central (SNC) and IVC-LeumiTech.
The studies present a market in transition, wherein massive cash flows primarily to mature and development corporations, whereas early-stage corporations should battle for the eye of buyers. In line with 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.
Because the begin of 2025, the quantity of M&A transactions has reached $71 billion, virtually 5 instances the corresponding interval in 2024, attributable to different large offers equivalent 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, thrice the degrees recorded final yr. Right here too, the cybersecurity trade stood out, contributing 58% of the entire worth of the offers, together with Goal 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 studies point out a unbroken slowdown in personal capital elevating. In line with 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 identified rounds fell to 141 – the bottom since 2020.
Nevertheless, 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 info from IVC-LeumiTech are related: $2.23 billion in 116 identified rounds, and an estimate of 204 rounds in complete, which is a decline of 24% from the identical interval final yr. Nevertheless, when excluding distinctive rounds of over $200 million, a extra constructive 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 bottom variety of lively buyers because the begin of 2024
The main sectors had been the identical in each studies – 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.
Traders, for his or her half, have gotten extra discerning: In line with SNC information, the variety of lively buyers has dropped to only 230, the bottom because the begin of 2024, though you will need to observe that greater than half of them are international buyers. SNC CEO Avi Hasson summed it up as a “market in transition,” the place funding is slowing however M&A is breaking data. Then again, LeumiTech CEO Maya Eisen Zafrir harassed 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 large offers, in opposition to a slowdown in personal capital elevating. The important thing query heading into 2026 is whether or not the massive 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.
