This Week in Israeli Venture: Q1 2026 report with $3.4 billion raised and return to stability
The Q1 2026 tech review report was published this week, and Israeli startups raised $3.4 billion (despite much of that quarter being characterised by war), signalling a return to stability. One theme that emerges is that capital is increasingly concentrated, with 10% of deals securing over half of all funding, and cybersecurity/enterprise software dominating at 70% of investment. Furthermore, early-stage funding is rising as mid-stage activity remains suppressed, signalling a shift in growth-stage capital support.
Q1 2026 tech review by IVC Data and Insights and LeumiTech
Alongside market activity, the report offers a broader view of Israeli tech, covering employment and salary trends, structural shifts in the industry, the dominance of sectors such as cybersecurity and AI, capital concentration, and investor activity patterns.
Israel’s economy and financial markets are booming even as conflict rages in the Middle East
The IMF estimates that Israel’s economy will grow by 3.5% this year, compared to 2.3% for the United States and 1.3% for the EU. It also means Israel’s GDP is forecast to outperform all G7 countries in 2026. Next year, Israel is forecast by the IMF to see economic growth of 4.4%, continuing to outperform many major developed economies.
Congrats to Kompas VC on fund II!on a
€160 million ($187.5 million) fund focused on startups tackling the "physical world": decarbonization, manufacturing, supply chains, and critical infrastructure in Israel and Europe.
The Vertical Report 2026 Full Version -
Euclid's annual analysis of 4K+ financings, 250+ exits, and the major trends in Vertical AI
What we’re watching
- Requests for startups Summer 2026 edition
- How AI’s impact on software is pushing VCs from Bits to Atoms
- Alphabet, Amazon, Microsoft, and Meta plan to spend a combined $725 billion on AI infrastructure this year
Published on IsraelVC. Curated by Eze Vidra.