Investment in Israeli tech companies has dropped to the lowest quarterly rate in nearly five years, a result of the global downturn in tech investment and fierce protests in Israel over a government plan to rein in the judiciary, a report released Sunday says.
(Bloomberg) — Investment in Israeli tech companies has dropped to the lowest quarterly rate in nearly five years, a result of the global downturn in tech investment and fierce protests in Israel over a government plan to rein in the judiciary, a report released Sunday says.
The Israel-based Start-Up Nation Policy Institute warned the government that weakening the legal system risks destroying the successful tech industry. The government has paused its legislation and entered talks with the opposition following three months of mass protests led by the tech and business establishment.
The think tank report said $1.7 billion were invested in Israeli tech companies in the first quarter of 2023, with 40% of the overall investment raised by just three companies — Wiz, Via, and eToro. The investment is the lowest since the third quarter of 2018, it said. The researchers also recorded a steep drop in the number of overall fund raising rounds in the first quarter of the year (112), the lowest since 2014.
Uri Gabai, the chief executive officer of the institute, called the findings “very concerning.”
“The combination of the global slowdown and the local instability could be devastating for Israeli tech,” he said in a statement accompanying the report. “We welcome the suspension of the judicial reforms, but so long as there remains uncertainty about the future of Israel’s democratic institutions, the tech industry will continue to be harmed.”
Tech accounts for over half of Israel’s exports and a quarter of its tax revenues, according to government figures.
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