‘Normalization Already Happened. The Only Question Is Formalization’: How Israel and the Gulf Are Building a Tech Partnership Beneath the Surface
Startup Nation Central’s latest data points to a deeper Gulf role in Israeli tech than the numbers alone suggest, one built on ecosystem fit, indirect investment routes, and long-term regional considerations
At first glance, the Gulf Cooperation Council (GCC) does not seem to carry significant weight in Israel’s technology sector. The figures do not jump off the page. Investment volumes appear restrained, deal sizes remain relatively small, and most of the activity that can be clearly identified points to a single country.
Taken on its own, that picture points to a limited role. It is orderly, almost too orderly. What it captures is real, but it leaves out a parallel layer of activity that does not lend itself easily to measurement. Much of the Gulf’s engagement with Israeli technology sits precisely in that space, between what can be formally tracked and what is simply known inside the ecosystem.
The Annual Report 2025, published by Startup Nation Central, places this gap in context. In 2025, total private investment in Israeli tech reached $16.7 billion, even as the number of funding rounds fell. At first glance, the drop in deal count might raise questions. The report’s data points elsewhere. Capital has become more concentrated, moving toward fewer companies and larger rounds, with a clear preference for later-stage firms that have already demonstrated traction. The direction is unmistakable: less emphasis on volume, more on scale.
Seen against that broader shift, Gulf-linked investment takes on a different meaning. The report shows that participation from GCC actors is concentrated mainly in early-stage rounds, with relatively small disclosed ticket sizes. Read narrowly, that could suggest caution. But the report also makes clear that a significant share of Gulf activity never appears directly in the numbers. Investments are frequently channeled through international venture funds or family offices operating outside the region, complicating attribution and flattening what is, in reality, a more layered pattern of involvement.
This is where the United Arab Emirates becomes especially visible. Its prominence in the data reflects diplomatic normalization and regulatory openness, not necessarily a monopoly on Gulf interest. Emirati investors can operate directly and transparently, leaving a clear statistical trail. Investors from other Gulf states, by contrast, frequently rely on intermediaries or offshore structures. Their participation exists, but it rarely appears under a GCC label. The imbalance in the data reflects political realities as much as it reflects capital flows.
That distinction becomes clearer through the perspective of Yariv Becher, vice president for business development and partnerships at Startup Nation Central. Speaking with The Media Line, Becher stressed that the available data significantly understates the level of Gulf involvement in Israeli technology.
“What I want to say is there is much more investment coming from the Gulf than the numbers that you see here,” he said. “These are only things that we can say that come directly from the Gulf.”
What I want to say is there is much more investment coming from the Gulf than the numbers that you see here
Becher explained that the UAE’s dominant role in the data stems from its ability to invest transparently. “One is the fact that we have normalization, we have diplomatic relations, and so we can trade, and they can invest directly,” he said. By contrast, he noted that investors from Saudi Arabia are already active but typically choose indirect routes.
“There are a number of investors in Saudi Arabia that invest in Israeli tech,” Becher said. “Usually they do it either through investing in foreign VCs, mainly Americans, but also family offices that have Saudi families that have offices in other countries, either in Europe, in London, or the UAE.”
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While this activity is not expressed in shareable datasets, Becher emphasized that it is tangible for those operating within the ecosystem. “We have a collection of anecdotes,” he said, “but it doesn’t translate into data that I can share in terms of numbers, but we definitely see a lot of activity there.”
Moving beyond the mechanics of investment, Becher described a more fundamental alignment between Israel’s innovation ecosystem and Gulf economies, with the UAE standing out in particular. In his view, Israel’s strength lies in the density of its technological know-how and entrepreneurial experience, while the UAE provides something different but equally critical: the ability to support growth through capital, infrastructure, and access to scale.
“The UAE has a developed economy, they have a growing tech activity and ecosystem there, and they have available, of course, capital,” he said. “It’s just, you know, it’s only natural that they would look at Israel as a potential partner for that ecosystem.”
This complementarity influences corporate strategy just as strongly as it directs investment flows. Becher described a pattern in which Israeli companies that have already validated products and sales, often beginning in the US market, turn to the UAE as a platform for expansion.
“So what you would see in terms of strategy is companies that have a product, they have sales, probably started in the US market,” he said. “They want to expand, grow, and scale. They would turn to the UAE to do that.”
The report’s sectoral data supports this logic. Cybersecurity and business software dominate from a financial opportunity perspective, while agri-food, energy, water, climate, and health technologies reflect the Gulf’s structural challenges. Becher framed this dual focus as central to the motivation behind normalization itself.
“Part of the motivation to normalize relations with Israel is to have access to Israel’s innovation ecosystem,” he said, outlining three dimensions: “One is sourcing solutions that can help them address challenges. The second is financial opportunities to invest and have financial gains. And the third is having access to that entrepreneurship spirit and learning from the experience that Israel has.”
This interest, he added, extends beyond the UAE. Bahrain and Saudi Arabia also show engagement across these areas, albeit under different political and institutional conditions. Bahrain’s growing emphasis on digital governance and cyber coordination reflects a parallel institutional track that complements private-sector activity.
At the same time, Becher acknowledged that the relationship has faced structural challenges. He identified four recurring gaps: “There are four misses. There is mistrust, misunderstanding, misalignment, and misexpectations.”
These, he added, are the natural result of decades without diplomatic relations and of differing business cultures.
He explained that mistrust stemmed not from conflict, but from lack of contact, while misunderstanding reflected cultural gaps. Misalignment and misexpectations, particularly among investors, required adjustment between traditional Gulf investment models and the risk-driven logic of technology.
Becher noted that significant progress had been made in addressing these gaps following the Abraham Accords, until October 7, which strained ties. Even so, he argued that the resilience of the relationships built during that period was evident.
“I think that the relations with the countries in the region were able to sustain the challenges that the situation presented,” he said.
Becher also stressed that Israel’s tech performance remains far more correlated with global markets than with regional security developments. “If you look at the numbers and you compare it to other markets, it’s almost totally divorced from what’s going on in the region,” he said, adding that performance trends closely track the American market.
If you look at the numbers and you compare it to other markets, it’s almost totally divorced from what’s going on in the region
That resilience, he explained, is linked to the ecosystem’s maturation. “What we’re seeing happening over the past few years in Israel is a maturity of the ecosystem,” Becher said. “You see much more growth companies, much more investments in a later stage.”
Looking ahead, Becher described a gradual recovery in engagement with countries that already maintain diplomatic relations with Israel. As for Saudi Arabia, he emphasized that interest exists, but timing depends on political developments.
“I want to quote someone who said: ‘We already have normalization. The only question is formalization.’”
Even in the absence of that formal step, engagement continues. “You can say that we visit (Saudi Arabia) regularly,” he said.
Looked at closely, the data and Becher’s testimony describe a relationship that rarely makes headlines but continues to take shape in practice. Israel and the Gulf are building their tech ties through repeated contact, economic compatibility, and gradual institutional familiarity, a process that is already influencing the region’s innovation landscape, even if the numbers lag behind the reality.
