Israeli high-tech is starting June with remarkable funding momentum. In a span of two weeks, several of the year's largest rounds closed, pushing first-half 2026 fundraising past $8.5 billion — a 45% increase over the same period last year, according to a Poalim Tech and Dealigence report.
The headline number tells a story of concentration: the number of rounds fell about 35% as investors wrote bigger checks into fewer, more mature companies. Cybersecurity investment more than doubled year-over-year.
The Week's Biggest Rounds
DriveNets, the Ra'anana-based networking software company, raised $410 million in a Series D at an $8.5 billion valuation. The round was led by Bessemer Venture Partners and Atreides Management, with new investors including AMD and Red Dot Capital Partners joining existing backers Pitango and D1 Capital Partners. DriveNets, which builds Ethernet fabric solutions for large-scale AI networks, said it has been cash-flow positive since 2025 with more than $1 billion in secured business backlog.
Cyera, a data security and identity management company powered by AI, raised $600 million at a $12 billion valuation — a fourfold increase in 18 months. Evolution Equity Partners led the round, with participation from Singapore's Temasek and Israeli fund Cyberstarts, alongside Accel, Sequoia, Lightspeed, and other leading funds. Cyera is now the second most valuable privately held Israeli tech company after VAST Data, with $2.3 billion raised to date.
Aryon Security, a Tel Aviv-based cloud security enforcement startup founded by IDF cybersecurity veterans, raised $29 million in Series A funding. Investors include Shlomo Kramer (co-founder of Check Point and Imperva), George Kurtz (CEO of CrowdStrike), and Datadog Ventures. The company has raised $38 million to date.
Rylo (formerly Nagish), an Israeli AI startup providing real-time speech and sign-language translation for the deaf and hard-of-hearing community, raised $85 million led by General Catalyst and Canaan at an estimated $500 million valuation. The company, based in Tel Aviv and New York, reached early profitability after securing FCC licensing for the U.S. market.
The Macro Picture: Innovation Authority Report
Against the backdrop of these rounds, the Israel Innovation Authority released its 2026 State of High-Tech report, covering 2025 data. The headline numbers are striking: high-tech exports reached approximately $85 billion — 58% of Israel's total exports. Exits hit a record $84 billion across roughly 198 transactions. The sector's output grew 8.2% in real terms, contributing roughly half of Israel's overall GDP growth. Israel ranked as the fourth-largest startup fundraising hub globally, behind San Francisco, New York, and Boston.
Not All Rosy: Challenges Remain
Alongside the positive news, ecosystem conversations highlight concerns about the strong shekel squeezing export revenues and accelerated expansion of R&D operations outside Israel. AI chipmaker Hailo laid off about 110 employees — roughly 50% of its workforce — in a restructuring to sharpen focus on robotics and Physical AI, marking the company's second round of cuts in six months.
What's Next
The Money Tel Aviv 2026 conference is set for June 18, focusing on fintech and payments. Later this month, The NEXT 2026 summit will connect VCs with leading startups.
The Israeli fundraising market continues to demonstrate resilience and selectivity: fewer companies are raising, but those that do are raising at levels never seen before. Cybersecurity, AI, and infrastructure remain the hottest areas.
