Israel’s Tech Industry Hits New Highs: Record $10.5 Billion in M&A as Market Matures

Israel’s technology sector achieved new heights in 2024, with mergers and acquisitions (M&A) setting a record $10.5 billion, a 22% increase over the previous peak of $8.6 billion in 2021, according to a report by Vintage Investment Partners. This performance underscores the sector’s resilience and global appeal.

One notable highlight of the report is the dominance of international buyers, who accounted for 78% of all deals. Among the standout transactions were SAP’s acquisition of WalkMe for $1.5 billion and Permira’s purchase of BioCatch for $750 million. Additionally, after a two-year slowdown, technology giants such as Microsoft and Applied Materials have resumed acquisitions in Israel, signaling renewed confidence in the market.

At the same time, Israel’s venture capital sector is undergoing a transformation. The number of new funds declined by 35% (from 40 in 2023 to 26 in 2024), but the average fund size surged from $125 million to $202 million. "We are witnessing a process of consolidation," says Vintage managing partner Asaf Horesh. "Investment institutions are favoring larger funds with proven track records."

Another trend identified in the report is a 25% increase in the number of new startups founded by experienced entrepreneurs, reflecting growing confidence in the ecosystem despite broader shifts in investment patterns.

Aggregate capital raised by Israeli companies dropped by 12%, from $9.2 billion in 2023 to $8.1 billion in 2024, while the number of deals fell from 682 to 434. However, the average deal size rose sharply by 37%, indicating a shift toward fewer but more substantial investments.

Artificial intelligence continues to drive the market, with AI-related deals comprising 41% of total investments in 2024, up from 26% in 2023. "Young AI companies are raising tens of millions of dollars at early stages, primarily to fund costly computing infrastructure," Horesh notes.