Israeli startups raised approximately $8.4–8.6 billion across 129 funding rounds in the first half of 2026, marking a 45–52% year-over-year increase according to reports from the Israel Innovation Authority and other trackers. The number of rounds declined about 35%, indicating capital concentration in larger, later-stage deals.

July 2026 has seen continued momentum with several notable rounds in AI, cybersecurity and defense:

  • Beacon Security closed a $13M Seed round for its AI cybersecurity data layer.
  • Neo Security (ex-SentinelOne) raised $50M in stealth for cyber solutions.
  • Oak, founded by Shai Morag, secured $60M for AI-native enterprise identity.
  • Hemispheric announced $52M for its NeuroAI foundation model.
  • Skapion raised $36M targeting drone-swarm defense systems.
  • Alta closed $25M Series A for AI marketing and sales agents.
  • Additional rounds included Velocity ($22M Seed, AI advertising), Tangos AI ($20M Seed, financial crime automation), Traysar ($25M, autonomous underground military systems) and Aligned ($60M Series B, B2B sales AI agents).

Sectors such as cybersecurity and agentic AI remain particularly strong. The Israel Innovation Authority expanded its Startup Fund effective mid-July, increasing participation caps for pre-seed and seed deeptech companies to support early-stage milestones.

Exits activity continues to build on the record 2025 numbers (~198 exits totaling ~$84B), though July-specific announcements have been lighter so far. Foreign capital accounts for roughly 70% of investments, while local VCs and corporate investors remain active.

Overall, the ecosystem shows resilience with selective larger rounds focused on deep tech, AI infrastructure and defense applications. Broader high-tech exports reached ~$85B in 2025, underscoring the sector's continued importance.

Data compiled from Israel Innovation Authority reports, Calcalist CTech, VC Cafe and Dealroom summaries as of mid-July 2026. X chatter from the israeli_tech_vc profile accounts was limited on July 18-19.

Key Takeaways

  • Funding volume up significantly YoY despite fewer rounds.
  • AI and cyber dominate July deal flow.
  • Policy support for early-stage deeptech expanded in July.