JERUSALEM, Sept 30 (Reuters) - Israeli high-tech

companies raised $11.9 billion over the first three quarters of

2025 as the technology sector continues to thrive despite

Israel's two-year-old war against Hamas militants in Gaza.

Funding was 13% higher than in January to September 2024,

the nonprofit Startup Nation Central said on Tuesday. It noted

that the volume of funding, which was led by cybersecurity

firms, rose despite a 22% decline in the number of deals to 569.

At the same time, mergers and acquisitions reached a record

$71 billion so far in 2025, nearly five times higher than the

same period in 2024, and largely driven by Alphabet's

$32 billion acquisition of cyber firm Wiz and Palo Alto

Networks' ( PANW ) $25 billion purchase of CyberArk.

The tech sector is a driver of Israel's economy, accounting

for about 20% of GDP, 15% of jobs and more than 50% of exports.

In the third quarter, Israeli tech firms raised $2.4

billion, up 9% from the same period in 2024 but down 50% from

the second quarter. The number of deals contracted to 141, down

24% from the second quarter and 38% year over year. M&A in the

quarter reached nearly $32 billion due to the Palo Alto-CyberArk

deal.

"The third quarter of 2025 highlighted a market in

transition. While funding slowed and investors became more

selective, M&A activity reached historic highs," said Avi

Hasson, CEO of Startup Nation Central.

"We are seeing fewer rounds, but at record sizes, signaling

confidence in scale-ready companies. At the same time, global

buyers are making some of the boldest bets we've ever seen on

Israeli tech, especially in cybersecurity."