Tel Aviv tech companies experienced a record-breaking year in 2025, despite Israel being embroiled in a multi-front war.
Tech companies operating in Tel Aviv raised $14.1 billion, a 77 per cent increase on 2024, alongside $46 billion in exits, the highest ever recorded, according to an official report.
The 2025 tech ecosystem report also noted a 12 per cent increase in international companies operating in the city, 23 new international research and development centres and 58 so-called “unicorns” – meaning privately owned companies valued at over $1bn – in Israel with a combined valuation of approximately $210 billion.
International investment surpassed $14 billion, up 70 per cent from 2024, with AI, machine learning, cybersecurity and fintech continuing to lead the sector.
Following the outbreak last month of the latest war with Iran, the Tel Aviv Stock Exchange actually closed at an all-time high, while other indices like the DOW and FTSE saw significant drops.
The rally was led by the TA-35 and TA-125 indices, which saw increases of more than 4.5 per cent each.
The NIS also strengthened 1.5 per cent against the US dollar, taking it close to a 30-year-high, with some analysts suggesting the surge was caused by investors predicting that the war would reduce the long-term threat of instability in the region.
The surge in investment has come in spite of Tel Aviv bearing the brunt of Iranian missile attacks during the war – last week 15 people were injured in the city by falling debris from intercepted projectiles.
Israeli officials have accused the Islamic Republic of using cluster munitions in its attacks, exacerbating the scale of the damage.
Cluster warheads contain dozens of smaller explosives, known as bomblets, which disperse across a wide area before impact. This allows a single missile to cause damage in multiple locations.
However, the use of such weapons is controversial due to their indiscriminate nature.
More than 100 countries have prohibited the proliferation or use of cluster munitions since 2008 under the Convention on Cluster Munitions (CCM).
Their use on civilian targets or in populated areas is widely regarded as a violation of international law and, potentially, a war crime.
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