Israel’s high-tech sector remained a driving force in 2024, securing over $12 billion in funding and outpacing the overall economy, which contracted by 1.5%. Cybersecurity attracted 36% of the total funding, while OpenAI co-founder Ilya Sutskever’s new AI startup, SSI, secured $1 billion in the largest investment round of the year. UAE-based defense and technology conglomerate EDGE Group announced a $10 million investment in ThirdEye Systems, an Israeli company specializing in AI-driven drone detection.
The partnership strengthens defense ties between Israel and the UAE while expanding global market access for Israel’s UAV detection technology. Following the announcement, ThirdEye’s stock surged 20%, temporarily halting trading on the Tel Aviv Stock Exchange. Start-Up Nation Central CEO Avi Hasson said, “It’s hard to overstate the importance of high tech to the Israeli economy.
It constitutes 20% of GDP compared to 9% in the US and 6% in the EU. It accounts for over half of Israel’s exports—53%, to be exact. Even in normal times, it’s the economic engine of the country.
Looking at 2024, while the rest of the economy contracted by 1.5%, high tech grew in GDP by 2.2%.”
Although cybersecurity companies constituted much of the high-tech sector’s economic success in 2024, there was growing diversity in the high-tech ecosystem. One example is Fermata Tech, a company that uses image data to automate pest and disease detection and identification. Fermata Tech founder and CEO Dr.
Valeria Kogan, recently named to Forbes 30 Under 30, discussed the challenges of pioneering ag-tech. Though we are seeing incredible technologies with significant global impact, we do not have a playbook for bringing an ag-tech technology to market yet.
High-tech growth drives Israeli economy
What is the right business model? What is the solid go-to-market strategy? How do we ensure adoption of the technology by farmers?
All these questions are yet to be answered, and the paths have yet to be paved by successful pioneers in the industry.”
Another sector making strides is food tech. Gavan Tech, an Israeli company specializing in plant-based protein extraction, is among the notable startups. Its flagship product, Fatrix, preserves molecular structure and functionality in plant-based proteins.
While already on the market, Gavan Tech remains in an early-stage investment phase. Having raised $8 million in 2024, co-founder and CEO Itai Cohen believes the company has proven market demand. Hasson remains cautiously optimistic about 2025.
“Israeli high-tech is heavily influenced by global trends—interest rates, public markets, and tech trends like mergers and acquisitions. Assuming the conflict ends, we’ll likely see a ‘Phoenix effect,’ with a resurgence in innovation and startups. Early signs are already visible, like increased applications in the Israel Innovation Authority’s pre-seed program.”
Looking ahead, Israel’s economy appears poised for a relatively positive outlook in 2025, driven by the resilience of its tech industry.
Multinational companies continue expanding their operations in Israel—Microsoft, for example, grew by approximately 10% last year. If geopolitical stability improves and global economic conditions remain favorable, Israel could further solidify its reputation as a global tech powerhouse, with cybersecurity, AI, ag-tech, and food tech leading the way.
Photo by; Domenico Loia on Unsplash
