Israel’s technology sector reached impressive milestones in 2024, demonstrating resilience even as the country remained embroiled in war. Reflecting its transition from a startup hub to a scale-up powerhouse, Israel’s cybersecurity sector attracted 36% of total funding. Meanwhile, OpenAI co-founder Ilya Sutskever’s new AI startup, SSI, secured $1 billion in funding, marking the largest investment round of the year.
Adding to this momentum, UAE-based defense and technology conglomerate EDGE Group announced a $10 million investment in ThirdEye Systems, an Israeli company specializing in AI-driven drone detection. The partnership strengthens defense ties between Israel and the UAE while expanding global market access for Israel’s UAV detection technology. Following the announcement, ThirdEye’s stock surged 20%, temporarily halting trading on the Tel Aviv Stock Exchange.
It’s hard to overstate the importance of high tech to the Israeli economy
“In general, it’s hard to overstate the importance of high tech to the Israeli economy,” Start-Up Nation Central CEO Avi Hasson told The Media Line. “It constitutes 20% of GDP compared to 9% in the US and 6% in the EU. It accounts for over half of Israel’s exports—53%, to be exact. Even in normal times, it’s the economic engine of the country. Looking at 2024, while the rest of the economy contracted by 1.5%, high tech grew in GDP by 2.2%.”
Discussing a recent report that polled 7,030 high-tech companies, Hasson noted that although cybersecurity companies constituted much of the high-tech sector’s economic success in 2024, there was growing diversity in the high-tech ecosystem. One example is Fermata Tech, a company that uses image data to automate pest and disease detection and identification.
Fermata Tech founder and CEO Dr. Valeria Kogan, recently named to Forbes 30 Under 30, discussed with The Media Line the challenges of pioneering ag-tech. “Though we are seeing incredible technologies with significant global impact, we do not have a playbook for bringing an ag-tech technology to market yet. What is the right business model? What is the solid go-to-market strategy? How do we ensure adoption of the technology by farmers? All these questions are yet to be answered, and the paths have yet to be paved by successful pioneers in the industry.”
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We do not have a playbook for bringing an ag-tech technology to market yet
Kogan added that she hopes the ag-tech sector will replicate the funding and merger-and-acquisition success of cybersecurity. Fermata secured $10 million in funding in 2024—small compared to the sector’s $12 billion total, but enough to scale effectively. Despite the ongoing war, Kogan noted that Israel’s global reputation in agricultural technology remains strong.
“Ag-tech is a global industry. During such challenging days, it is very important to continue seeing the bigger perspective,” Kogan said. “We very much appreciate our relationships with our global partners like Bayer and Syngenta and work with them together to bring technologies to many farmers regardless of country and nationality.”
Another sector making strides is food tech. Gavan Tech, an Israeli company specializing in plant-based protein extraction, is among the notable startups. Its flagship product, Fatrix, preserves molecular structure and functionality in plant-based proteins. While already on the market, Gavan Tech remains in an early-stage investment phase.
Having raised $8 million in 2024, co-founder and CEO Itai Cohen believes the company has proven market demand. “We are operating in the food tech sector, so it’s not classical high tech of Israel. It’s an early-stage company, and our growth is only going to be in 2026 and 2027,” he told The Media Line. Gavan Tech’s Fatrix-based butter substitute could see increased demand if climate change continues to impact cattle productivity.
Although emerging sectors show promise, cybersecurity remains the primary driver of Israel’s tech industry. “Cybersecurity’s dominance is undeniable. Israel has become a global powerhouse in this field, beyond Silicon Valley in some respects,” said Hasson.
However, the concentration of investment in cybersecurity highlights the underfunded potential of other sectors. “For example, health tech is Israel’s largest sector in terms of the number of startups, with 1,600 companies. But funding for these sectors is insufficient. We need to diversify and invest in future-oriented industries.”
Despite the challenges, Hasson remains cautiously optimistic about 2025. “Israeli high-tech is heavily influenced by global trends—interest rates, public markets, and tech trends like mergers and acquisitions. Assuming the war ends, we’ll likely see a ‘Phoenix effect,’ with a resurgence in innovation and startups. Early signs are already visible, like increased applications in the Israel Innovation Authority’s pre-seed program.”
The war is terrible, but it also brought new challenges that inspire solutions
“The war is terrible, but it also brought new challenges that inspire solutions. Combining this with Israel’s entrepreneurial spirit, I expect continued growth, particularly in defense tech and other emerging sectors,” Hasson concluded.
Looking ahead, Israel’s economy appears poised for a relatively positive outlook in 2025, driven by the resilience of its tech industry. Multinational companies continue expanding their operations in Israel—Microsoft, for example, grew by approximately 10% last year. If geopolitical stability improves and global economic conditions remain favorable, Israel could further solidify its reputation as a global tech powerhouse, with cybersecurity, AI, ag-tech, and food tech leading the way. Strategic investments from international players, such as the UAE’s EDGE Group, could further enhance this momentum.