A new report released on Sunday shows that investment in Israeli tech companies has dropped to its lowest quarterly rate in almost five years. The decline has been attributed to both the global downturn in tech investment and ongoing protests in Israel against a government plan to weaken the judiciary. The Start-Up Nation Policy Institute, based in Israel, has warned that weakening the legal system could threaten the country’s successful tech industry.
The report shows that $1.7 billion was invested in Israeli tech companies in Q1 of 2023, with 40% of the overall investment raised by just three companies. The researchers also recorded a steep drop in the number of overall fund raising rounds in the first quarter of the year. Tech accounts for over half of Israel’s exports and a quarter of its tax revenues, according to government figures.