Investment in Israeli climatetech sector fell significantly in 2024, dropping to US$613 million from US$1 billion in 2023, according to a report by the Israel Innovation Authority.

This decline of 39% parallels a global downturn of 41% in climate-tech funding.

In 2024, no new clean energy startups were established in Israel, despite the sector’s critical role in combating greenhouse gas emissions.

This absence raises concerns given the sector’s importance in addressing climate change.

Climate-tech made up just 6.4% of Israel’s total tech funding in 2024, down from 14.5% in 2023.

Experts blame weak infrastructure and limited public-sector support for the sector’s stagnation.

🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Misalignment between Israel’s innovation focus and market demand

Israel’s climate tech sector shows a concerning specialization gap when compared to global market needs and investment trends.

While 38% of Israeli climate tech companies focus on food technologies and 13% on climate-smart agriculture, these sectors are experiencing significant global investment decline, with food-tech funding dropping from $61.2 billion in 2021 to just $15.1 billion in 20231.

This sectoral imbalance is particularly troubling considering the complete absence of new clean energy startups in 2024, despite renewable energy being projected to grow at a CAGR of 6% from 2018 to 20252.

The government’s decade-long prioritization of protein and food tech over energy technologies demonstrates a strategic misalignment that threatens Israel’s climate tech competitiveness in the global market worth $32 billion in 20233.

This pattern suggests Israel risks missing the most promising climate tech growth opportunities while overinvesting in sectors facing reduced investor confidence, as evidenced by alternative protein funding dropping 27% and plant-based protein down 64% globally4.

2️⃣ Infrastructure gap blocking innovation commercialization

Israel suffers from a critical infrastructure gap between academic research and commercial climate tech development, especially in the energy sector.