Israeli startups raised over US$950 million across 18 deals in May 2025.

This amount represents a decline of more than 30% compared to the US$1.4 billion raised in May 2024.

The largest funding round in May was AI21 Labs’ US$300 million series D.

Smaller deals, ranging from US$5 million to US$32 million, occurred across various sectors, including cybersecurity, fintech, and defense technology.

May’s funding activity reflects ongoing investment interest in Israel’s high-tech ecosystem.

🔗 Source: Calcalist

🧠 Food for thought

1️⃣ AI and quantum computing dominate Israeli funding landscape

The two largest funding rounds in May came from AI21 Labs ($300M) and quantum computing company Classiq ($110M), highlighting Israel’s continued strength in frontier technologies despite broader market challenges.

This concentration of capital in advanced computing reflects a global pattern where AI and quantum technologies are attracting significant investment. In 2023, Israeli high-tech companies raised $6.9 billion across 392 deals, with deep tech and generative AI emerging as key growth areas 1.

Foreign investors have shown particular interest in Israeli deep tech companies, with their participation increasing even as local investment declined during challenging periods 2.

The substantial backing of AI21 Labs by industry giants like Google and Nvidia further demonstrates how Israeli startups are positioning themselves at the intersection of enterprise needs and cutting-edge technology, securing their place in the competitive global AI landscape.

2️⃣ Defense technology emerges as a strategic funding priority

Defense-focused startups are capturing significant investor attention, as evidenced by Kela’s $60 million raise and Line 5’s $20 million seed round—the year’s largest defense-tech seed deal.

This trend reflects a direct response to regional security challenges, with Kela specifically founded to develop AI-integrated battlefield operating systems 3.

The shift is also visible in founder movements, as demonstrated by Guardicore founders Pavel Gurvich and Ariel Zeitlin, who left Akamai to launch a new cyber-AI startup that immediately secured $32 million in funding.