Israeli startups raised roughly $8.6 billion of capital in the first half of 2026, up 45% compared to the $6 billion raised in the same time period last year, a report published by Poalim Tech and Dealigence on Wednesday shows.
Entrepreneurs with a record of success have enjoyed a comparative advantage over new entrepreneurs, raising 39% of the funds compared to 34% in 2025, the report reads.
Although the overall investment has grown, the number of funding rounds fell by about 35%, indicating that more new capital is being concentrated in fewer firms.
In addition, investment in cybersecurity firms doubled compared to the first half of the previous year. During the war with Iran, the cyber sector maintained stability, raising about $580 million in March, similar to last year, according to the report.
The report also tracked layoffs and cost-cutting measures at big technological companies, offset by recruitment at early- and mid-stage startups, which increased by 2%.
Poalim Tech wrote on LinkedIn, “The data point to a clear trend: capital is still here [in Israel], but it is flowing to companies that know how to display efficiency, focus, and performance in today’s competitive market.”
Another trend specified in the report is the growing number of lean companies, at times staffed by a single founder, which use AI-driven tools to develop products and services with limited early-stage funding, Ynet reported.
“One of the most interesting findings in the report is that the AI revolution has not changed the fact that young companies still need talented people in order to grow,” Ynet cited Adam Lazovski, co-founder and CEO of Dealigence, as saying.
“Experience shows that it is often during periods [of instability and change] that the most successful companies are built—companies that know how to do more with less, develop outstanding products and think about their business model from the earliest stages,” Lazovski added.
Poalim Tech is the tech division at Israel’s Bank Hapoalim, dedicated to the high-tech industry.
Dealigence provides top investors with real-time AI-driven insights and proprietary datasets that identify a company’s trajectory.
