Israeli startup investments decline by 63% over 7 consecutive quarters

By Al Mayadeen English
Source: Agencies
1 Oct 2023 15:06

Several factors have contributed to this downturn, including a reduction in foreign investment, the global economic slowdown, challenges encountered in raising venture capital funds, and the political instability prevailing in "Israel."

This June 21, 2017 photo shows a view of 'Tel Aviv', occupied Palestine (AP)

Investments in Israeli startups have seen a persistent decline over seven consecutive quarters, experiencing a substantial 63% decrease in tech funding during the first three quarters of 2023 when compared to the same period in the previous year, according to data provided by the Israeli-based Start-Up Nation Policy Institute (SNPI).

In the third quarter of 2023 alone, investments reached an approximate sum of $1.7 billion, marking a significant 40% drop compared to the corresponding period in 2022.

The cumulative investments for the initial three quarters of 2023 amounted to $5.6 billion, demonstrating a substantial 63% decline from the equivalent period in 2022 when investments had reached $14.7 billion.

Several factors have contributed to this downturn, including a reduction in foreign investment, the global economic slowdown, challenges encountered in raising venture capital funds, and the political instability prevailing in "Israel."

Moreover, "Israel's" high-tech investment decline has been more pronounced than that observed in Europe and the US.

Israeli startups have become cautious about accepting substantial funding due to concerns about being labeled as "unicorns." This cautious approach has also affected their growth and recruitment endeavors.

In addition, the number of funding rounds exceeding $100 million has decreased, with only 11 such rounds reported in "Israel" in 2023, compared to 55 and 36 during the same period in 2021 and 2022, respectively.

Despite the fact that a few Israeli startups managed to secure significant funding rounds in September, the prevailing pattern indicates that the industry is still wrestling with economic uncertainties and a deceleration in investment activity.