25 In Q2 2024, Israeli high-tech firms successfully attracted USD2.9 billion in capital, up from almost USD2 billion a year ago, according to a report by IVC and LeumiTech. This increase signified the highest influx of investments since the end of 2022. Nevertheless, a concerning trend emerged as 64% of the funds raised in Q2 gravitated towards just six tech companies. This heavy reliance on a handful of major players is worrying, according to a report by RISE Israel (formerly known as the Start-up Nation Policy Institute). A key highlight in this story is Wiz, an American-Israeli cloud cybersecurity unicorn, that secured USD965 million in funding this past Mayr. This funding round boosted Wiz to an impressive valuation of USD12 billion, making up a substantial 34% of all investments in Q2. Government must allocate larger budgets to support earlystage startups “The main red flag is the growing dependence on a small number of outstanding companies that raise mega-rounds,” said RISE Israel CEO Uri Gabai in an interview with Times of Israel in June. “As the security situation prolongs, the high-tech sector will also stabilize at a lower level of activity compared to the past. If the Israeli government wants to gradually return high-tech to pre-crisis activity levels, it needs to allocate larger budgets in this sector, especially in startups in their early stages.” With such market volatility, investing early in startups faces significant challenges. In this edition of IsraelDesks magazine, we speak to lawyers in Israel and overseas, as well as global investment platform, OurCrowd and the Israeli High-Tech Association, to learn how to help startups come through these difficult times, as they unfold a more wrinkled commercial map. Investing early in startups in challenging times
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