Israeli startups raised approximately $8.6 billion in the first half of 2026, a 45% year-over-year increase from roughly $6 billion in H1 2025. The headline number, however, masks a deeper shift: deal volume fell 35%, as investors wrote larger checks to fewer, more mature companies with proven traction in AI and cybersecurity.
The ecosystem is showing clear signs of maturation, and the M&A market is following suit. June alone saw three notable acquisitions, led by Canadian payments firm Nuvei's $2.75 billion all-cash purchase of Payoneer.
Fewer deals, bigger money
The data paints a picture of a consolidating market. In Q1 2026, 74% of all rounds included global investors — an all-time high, per Startup Nation Central. Tel Aviv ranked fourth globally in ecosystem value at $250 billion, according to the Start-up Genome report, with activity concentrated in AI, cybersecurity, and life sciences.
The 2025 annual figures set the stage: $15.6 billion in private funding across 717 rounds, with a record median deal size of $10 million. The trend has only accelerated in 2026.
June's standout rounds
June was packed with large fundraises. Cyera, the data-security and AI-trust layer startup, raised $600 million at a $12 billion valuation — quadrupling its value from 18 months prior. The round was led by Evolution Equity Partners with Cyberstarts, Temasek, and others.
DriveNets, building networking infrastructure for cloud and AI, raised $410 million at an $8.5 billion valuation. ZutaCore, which developed novel cooling technology for AI data centers, raised $100 million at a $600 million valuation from Samsung, Mitsubishi, and Carrier.
Coralogix, the observability unicorn, raised $200 million at a $1.6 billion valuation. NewCore, an identity-security company for the AI era, raised $66 million.
Earlier-stage deals included Rylo (formerly Nagish), an AI-powered real-time speech and sign-language translation platform, raising $85 million at a $500 million valuation and approaching profitability. PointFive closed a $60 million Series B for AI cost management; Aryon Security raised a $25 million Series A; and Upriver, an enterprise AI-agent startup founded by Talpiot graduates, raised $10 million.
M&A heats up
Beyond the Payoneer deal, Motorola Solutions acquired counter-drone specialist D-Fend Solutions for $1.5 billion — one of the largest Israeli defense-tech exits. Western Union picked up Israeli fintech GMT for $70 million.
Earlier H1 2026 acquisitions include Apple's purchase of Q.ai for roughly $1.5 billion (AI audio/wearables), Credo's acquisition of DustPhotonics for up to $1.3 billion (photonics/AI infrastructure), and Mobileye's $900 million purchase of Mentee Robotics (robotics/embodied AI).
The bottom line
Israeli tech is maturing fast. Fewer companies get funded, but those that cross the threshold receive checks several times larger than their predecessors. The growth is fueled by two mutually reinforcing sectors — AI and cybersecurity — with the former creating needs the latter fills. With a hot M&A market and strategic buyers from Apple to Motorola actively seeking Israeli technology, the ecosystem shows no signs of topping out.
