Report: 49% of Israeli high-tech companies lost funding during war

Forty-nine per cent of Israeli high-tech companies have reported losing investments since the beginning of the war on Gaza on 7 October, while 48 per cent of investors expect shares to decline next year, a report by Start-Up Nation Central revealed yesterday.

The report indicated that the situation is particularly challenging in the north of the country, where 69 per cent of high-tech companies are stationed. A separate survey of about 60 northern-based tech firms found that only 45 per cent are fully operational, 41 per cent have relocated their activities to central Israel and 20 per cent already know they won’t return to the north.

The report reflected the very low confidence among companies and investors in the Israeli government’s ability to develop recovery plans, with more than 80 per cent of companies and 74 per cent of investors doubting the government’s ability to assist the high-tech sector.

According to the report, high-tech companies were able to raise $7.8 billion in investments this year; four per cent less than the investments raised last year.

The value of mergers and acquisitions amounted to $9.6 billion this year, down $1 billion from the previous year, according to the report.

More than 50 per cent of companies believe the situation will improve in the coming year, and 72 per cent of investors believe that high-tech companies will continue to grow despite the economic distress caused by the war on Gaza.

The report stated that “due to the uncertainty caused by the ongoing conflict and the Israeli government’s economic policy, which is widely considered to be destructive, the technology sector’s immunity will not exist.”

Smotrich: War on Gaza cost $68bn to date