"A conflict with China is on the horizon. Trump’s focus on this will influence Israel’s tech market"

As Israel’s high-tech sector navigates 2025’s shifting landscape, industry leaders remain cautiously optimistic. At Calcalist and Bank Hapoalim’s Roadshow+ event, experts highlighted challenges and opportunities, from the growing importance of defense-tech to the transformative role of AI. "Civil resilience drives innovation," said Vertex Ventures’ Tami Bronner, emphasizing early-stage investment potential. Meanwhile, Blumberg Capital’s Yodfat Harel Buchris warned of macroeconomic pressures and geopolitical shifts, including Trump’s re-election and tensions with China. With IPOs back on the agenda and global markets evolving, Poalim Tech’s Tomer Notkin stressed the importance of supporting startups and fostering international collaborations.

Roadshow+ panel.

What are the challenges facing the high-tech industry, and startups in particular, in 2025?

"2025 begins with a new U.S. president and complex economic dilemmas," said Harel Buchris. "Our industry constantly competes with interest rates, so macroeconomic factors will also influence the tech sector in 2025. Many funds raised in 2020–2021 are approaching new fundraising rounds, requiring us to address these challenges. The tech world is undergoing significant shifts. Defense-tech is gaining attention in Israel, the U.S., and Europe. AI will also continue to thrive."

Notkin agreed that the defense sector will play a significant role in 2025. "An ecosystem is emerging, creating opportunities for banks to finance it. Demand is almost endless, as governments are key clients. What was once a niche market is now expanding."

"Could you have imagined us discussing Israel's industry this way a year ago? It’s remarkable," said Bronner. "The stock market is 20% higher than pre-war levels, the shekel is stable, and innovation is booming. As early-stage investors, we remain optimistic. Civil resilience is the most valuable lesson we've learned this year, and it drives us to keep investing in early-stage companies and innovation."

How long can this resilience last?

"It depends on what lies ahead," said Bronner. "I hope for calm. We need internal stability in Israel. We should be cautiously optimistic, but continue supporting and driving innovation. Let’s hope no circumstances force us to divert resources elsewhere."

Harel Buchris added, "The high-tech sector, built on personal and institutional relationships, could be more stable. Despite national budget cuts, we still attract foreign investment. Our role is to remain the country's best ambassadors, keep funds flowing, and open doors for startups abroad. For instance, Japan’s market opened more to Israeli companies this year. We must work to balance the trend of Israeli companies registering as foreign entities."

Will Trump’s re-election have a major impact?

"Trump’s election is proof that anything can happen," said Bronner. "From legal troubles to re-election, he demonstrated resilience. On one hand, there’s M&A activity and eased regulations, which bolster security and the economy. On the other hand, trade and immigration restrictions could affect Israeli companies, as could AI regulations. We are watching closely."

"A conflict with China is on the horizon," added Harel Buchris. "Trump’s focus on this will influence Israel’s tech market."

Is Israel falling behind in terms of AI regulations?

Bronner said, "Our early-stage investment fund has seen a surge in generative AI companies since ChatGPT launched. Over 20% of startups now operate in generative AI, reflecting the trend locally."

"In tech today, we rely greatly on academia," said Harel Buchris. "In generative AI and modeling, collaboration with academia is critical, as is access to data from banks, insurance companies, and healthcare services to drive innovation. The cooperation with Bank Hapoalim is so critical because the data in banks, insurance companies and health services are the ones that will move the industry forward and give entrepreneurs a bridge to more correct and better models for the world."

"60–70% of companies we see today focus on data," Bronner added. "It's a sector we prioritize more than ever."

Do you expect there to be IPOs in 2025?

"2025 is continuing the trends of 2024," said Notkin. "Conditions, like falling interest rates, profitable companies, and advanced-stage firms, signal market activity. Unfortunately, Israel's situation is more complex, but initiatives like the Roadshow event are essential, especially now. We've put IPOs back on the agenda."

"Macroeconomic factors will influence IPO potential next year," said Harel Buchris. "In the first half of 2025, we'll see more talk than action, but the final quarter will likely be more dynamic and exciting."