Israeli startups raised approximately $8.6 billion in the first half of 2026, a 45% increase year-over-year and the strongest first half since 2021, according to data from Poalim Tech and Dealigence.
The surge reflects a concentration of capital in fewer, higher-quality companies: the number of deals actually fell by about 35%, signaling that investors are placing larger bets on the most promising startups. Cybersecurity investment more than doubled year-over-year, while AI also saw robust demand.
Innovation Authority Expands Deep-Tech Support
The Israel Innovation Authority (IIA) announced an expansion of its Startup Fund, designed to address financing gaps in high-risk deep-tech ventures. Key changes include raising the IIA's maximum participation from NIS 1.5 million to NIS 2 million at pre-seed, and from NIS 5 million to NIS 6 million at seed. The Series A cap stays unchanged at NIS 15 million.
The fund operates as a non-dilutive grant conditional on matching private capital, aimed at bridging the gap between high technological risk and private investor appetite. The expansion comes as round sizes rise and deep-tech companies need more runway for R&D and commercialization.
Lama AI Closes $12M Series A
Israeli fintech Lama AI, which built an AI agent platform for banking credit assessment, loan origination, and lending automation, raised a $12 million Series A led by EJF Ventures. Other participants included Fin Capital, 1st & Main, Viola Ventures, Hetz Ventures, and SixThirty.
Founded by Omri Yacubovich and Ran Magen, the company reports 300% year-over-year revenue growth and says customers have seen hundreds of percent improvements in key metrics. The round will fund go-to-market expansion in the U.S. and further AI product development for regulated financial institutions.
Government Approves National AI Plan
On June 16, the Israeli government approved a sweeping national AI program led by the Prime Minister's Office and the National AI Directorate. Key targets include 100,000 sovereign GPU units for national computing infrastructure and establishing a national quantum computer based on Israeli-developed technology.
The plan aims to reduce dependence on foreign providers, strengthen technological sovereignty, and position Israel as a global AI powerhouse. It also covers workforce education, international partnerships, and acceleration hubs.
DevGeekWeek 2026 Underway
Post-conference workshops for DevGeekWeek 2026: The AI Transformation Edition are running in Tel Aviv through July 1. Organized by John Bryce, the sessions cover AI, cloud-native architecture, Kubernetes, DevOps, and microservices, following the main conference at the Daniel Hotel in Herzliya.
The Macro Picture
The macro environment continues to pose challenges. Finance Minister Bezalel Smotrich has pledged an assistance package for tech companies hit by the strong shekel, which erodes profitability and encourages offshore relocation. Meanwhile, the IIA's State of High-Tech 2025 report revealed a net loss of 3,500 R&D workers from Israel, the first brain drain of its kind in a decade, with only 62% of private tech company employees remaining in the country.
Bottom Line
Israeli tech sits at a complex crossroads: massive capital inflows to top-tier companies and ambitious national initiatives signal a robust, thriving ecosystem. But the brain drain, strong currency headwinds, and heavy reliance on a few sectors (cyber, AI) create structural dependencies that demand strategic attention. The coming weeks, with the expected government aid package and the AI plan's rollout, will be pivotal.
