Israeli high-tech investment plummets in first half of 2023, industry monitor says

abcnews.go.com:

An Israeli tech industry monitor says investment in Israeli start-ups has plummeted in the first half of 2023

JERUSALEM — Investment in Israeli technology startups plummeted in the first half of 2023, an Israeli tech industry monitor said Tuesday, citing the government's divisive judicial overhaul plan as a main driver of the downturn.

Start-Up Nation Central, a nonprofit organization that tracks and engages with Israel's technology industry, said that it had seen a 29% decrease in private funding in Israeli tech in the first half of 2023 compared to the second half of 2022, and a steep drop in investor participation. Initial public offerings and mergers and acquisitions also hit a five-year low, it said.

The organization said that uncertainty in Israel because of the judicial overhaul “is already being felt with indicators such as decreased fundraising and fewer emerging Israeli startups.”

Yaniv Lotan, a vice president at Start-Up Nation Central, said the correlation between the judicial overhaul and investor hesitancy is clear. He said that while technology investment has stabilized in the U.S. and globally over the past year, over the same period “here in the Israeli high-tech market, we are experiencing a continued downward trend.”

Israel's high-tech sector is a major engine of the country's economy, making up half of the country's exports. It employs tens of thousands and its startup companies have drawn billions of dollars in investment in recent decades.

“In the end, markets don't like uncertainty," Lotan said.

The report was released a week after Prime Minister Benjamin Netanyahu and his allies passed a law that weakens the Supreme Court's oversight of government decisions, a key part of the government's