Israeli technology companies raised approximately $3.6 billion across 91 funding rounds in the third quarter of 2026, a 53% increase compared with the same period last year, according to preliminary findings from the Israeli Tech Review released by LeumiTech and IVC.
The total raised since the beginning of the year has exceeded $11 billion, representing a 50% increase compared with the corresponding period in 2025.
Despite the year-over-year growth, third-quarter funding was approximately 7% below the quarterly average for the first half of 2026. IVC attributed the decline to seasonal factors, including summer vacations and the Jewish High Holidays, which began relatively early in September.
The number of disclosed funding rounds remained broadly in line with the previous quarter.
Including rounds whose details have not yet been disclosed, or are expected to be reported later, IVC estimates that approximately 225 rounds took place in Q3, raising a combined $4.3 billion. On this basis, the estimated decline in capital raised compared with the first-half quarterly average was approximately 2%.
In seven of the 10 years between 2016 and 2025, both funding totals and round counts declined in the third quarter compared with the second. During that period, Q3 funding declines ranged from 6% in 2019 to 52% in 2024.
Maya Eisen Zafrir, CEO of LeumiTech, said the figures reflect continued growth alongside uneven investment activity.
"The growth trend we are seeing in Israeli high tech remains healthy, with an increase of more than 50% in funding since the beginning of the year, compared to the same period in 2025," she said.
"This quarter’s figures remind us that growth is uneven: deal numbers remain relatively low, and a substantial share of capital is concentrated in a small number of companies, stages and sectors."
Eisen Zafrir added that the concentration of capital presents a challenge for Israeli companies, emphasizing the importance of providing opportunities and support to emerging startups and entrepreneurs.
Guy Holtzman, chairman and CEO of IVC, said the quarter was affected by summer vacations, holidays and uncertainty in international capital markets.
"Even so, we continue to see growth in the amount of capital raised by the Israeli high-tech sector, an increase in the number of new companies, a steady presence of foreign investors, and the emergence of new industry sectors," he said.
Cybersecurity leads investment
Cybersecurity remained the dominant sector in Israeli high-tech funding during the first three quarters of 2026, raising approximately $4.3 billion, or 38% of all funding. More than $1.7 billion was raised by cybersecurity companies in Q3 alone, accounting for over one-third of the quarter's total.
Enterprise software also recorded substantial growth. Funding in the sector during the first three quarters of 2026 already matched the total raised in 2020, with its share of overall funding approaching 30% for the first time since that year.
Meanwhile, funding for defense-tech, space and quantum companies slowed to approximately $170 million in Q3, compared with more than $800 million raised during the first half of the year.
Despite the quarterly slowdown, the three sectors together accounted for nearly 10% of funding raised since the beginning of 2026. Their combined funding total for the year is expected to exceed the 2025 figure.
Foreign funds account for more than 70% of investments
Foreign investors continued to play a central role in Israel's high-tech sector, accounting for approximately two-thirds of active venture capital funds and participating in more than 70% of investments.
During Q3, approximately 110 foreign funds and 60 Israeli funds made their first investment of the year in Israeli high-tech companies.
The figures compare with approximately 170 foreign funds and 90 Israeli funds in Q1, and 160 foreign funds and 60 Israeli funds in Q2.
IVC said the share of foreign funds among active investors in Israel has declined somewhat since 2023, but they remain a major source of capital for the sector. Based on activity so far, full-year 2026 investment activity appears likely to resemble 2025 and the levels recorded in 2020, before the 2021 boom.
The analysis covers traditional and corporate venture capital funds, excluding other sources of financing, such as angel investors and government grants.
Mid-stage companies account for largest share of Q3 funding
Mid-stage companies raised approximately $1.8 billion in Q3, accounting for about 49% of total funding during the quarter.
Early-stage companies, from pre-seed through Series A, raised approximately $1 billion, remaining close to their quarterly average since the beginning of 2025.
Late-stage companies raised approximately $840 million, representing about 23% of Q3 funding. IVC noted that late-stage funding has tended to account for a smaller share of third-quarter investment in recent years, potentially reflecting deal timing and reporting delays around the holidays.
The shekel-dollar exchange rate remained within a narrow range around NIS 3 per dollar throughout Q3, following fluctuations and significant shekel appreciation in previous quarters.
The preliminary findings were released as part of the quarterly Israeli Tech Review, which examines funding rounds, mergers and acquisitions, and public capital market activity across Israeli and Israel-related high-tech companies.
The full Q3 2026 report is scheduled for publication in October.