Israel's Startup Growth Amidst Ongoing Conflict: Insights on Innovation

In the first half of 2024 , Israeli startups have been thriving and making significant contributions not only to daily human activities worldwide but also to the country 's defense efforts , especially following the October 7 Hamas attack . Venture capital investments in Israel have been on the rise , exceeding .8 billion in Q2 , driven by a small number of mega rounds and cybersecurity startups . Despite this growth , there has been a decline in the number of active investors in Israel , both local and foreign , as highlighted by Rise , an Israeli think - tank.

At the Cyber Week 2024 conference in Tel - Aviv , Jon Medved of OurCrowd and Eyal Niv of Pitango discussed the state of the Startup Nation amidst the ongoing war , noting that while there has been a global downturn in venture capital investment , strong Israeli companies continue to thrive . Particularly in sectors like cybersecurity , Israel has been a hub for innovation , with a majority of cyber exits happening within the country . However , early - stage startups have been facing challenges , prompting initiatives like the Resilience Fund by OurCrowd to support these companies.

In response to the impact of the war on Israeli children who have lost parents during the October 7 attack , the Israeli tech ecosystem established the Israeli Children Fund , providing financial support for these children . Despite the ongoing conflict , Israel 's central bank predicts steady GDP growth in the coming years , with the startup ecosystem playing a crucial role in sustaining the economy . Israel 's tech sector , which employs a significant portion of the workforce , contributes significantly to the country 's GDP and tax revenues.

Furthermore , Israel 's prowess in AI and the concentration of talent in this field have positioned the country as a global leader in artificial intelligence . Israeli startups utilizing AI technology have been attracting substantial VC funding , with companies like AI21 and Hailo securing significant investments . While the Israeli tech landscape remains strong , concerns about international isolation and its impact on the high - tech sector loom . However , Hanan Friedman of Israels Bank Leumi remains optimistic , citing the resilience and drive of Israeli citizens and youth as key factors in propelling the industry forward.

Despite the challenges posed by the ongoing conflict , Israel 's innovative spirit remains unwavering , rooted in centuries - old traditions of persistence , learning , and hard work . Former Israeli prime minister Naftali Bennett emphasized the importance of nurturing the innovative and resilient young people of Israel , who are poised to become the super entrepreneurs of the future . As Israel continues to navigate through crises , its commitment to innovation and determination to overcome obstacles remain at the forefront of its national identity.