Israeli Tech M&A Hits $71B in 2025 Amid Funding Decline

In 2025, Israel's tech sector experienced a significant shift with private funding declining sharply in the third quarter to $2.4 billion, a 38% drop from the previous quarter excluding a major $2 billion raise, and a 59% decline including it, along with a 24% decrease in deal volume to 141 rounds. Despite fewer funding rounds and a 20% drop in active investors to 230, the median round size reached a record $10.5 million, indicating investor focus on larger, more mature companies. Meanwhile, mergers and acquisitions (M&A) activity surged to historic highs, totaling $31.8 billion in Q3 alone, led by Palo Alto Networks’ $25 billion acquisition of CyberArk, the second-largest in Israeli tech history, and Verint Systems’ $2 billion sale. Cybersecurity dominated the M&A landscape, accounting for 58% of deal value, with notable acquisitions including Aim Security and Findings. Year-to-date, private funding rose 13% to $11.9 billion despite a 22% decrease in deal count, while M&A skyrocketed to $71 billion, nearly five times the amount in 2024, propelled by high-profile exits like Wiz and CyberArk; additionally, public listings gained traction with eToro and Via Transportation going public. Startup Nation Central’s CEO Avi Hasson described the market as being in transition, with fewer but larger funding rounds and unprecedented global investment interest, particularly in cybersecurity.