Investment in local healthcare-focused startups last year plunged to their lowest level in five years, after a slight recovery seen in 2024, according to a joint report by the Israel Advanced Technology Industries Association, the Israel Innovation Authority and PwC Israel.

Last year, Israeli health tech, or life sciences, startups drew $1.6 billion in private investments, a 40 percent decline over the funds raised in 2024 and less than half the $3.3 billion recorded in 2022, the data in the report showed. At the same time, average funding deal size fell below $10 million for the first time in at least five years.

While investment in health tech companies declined, overall investment in Israeli tech startups and firms increased 24 percent to $15.6 billion in 2025, according to data by Startup Nation Central, which tracks the local tech ecosystem.

“When we look at the trends for the tech industry as a whole, we see that three areas, which are cybersecurity, defense tech, and AI, mainly attracted investment, and for more traditional tech industries, including health tech, 2025 was a significantly challenging year in terms of fundraising volumes,” Omer Gavish, life sciences leader and partner at PwC Israel, told The Times of Israel.

“Overall for health tech it is always more challenging than other tech industries as huge amounts of funds need to be invested, since the development phase of technologies is much longer until validation and investors can see a product.

“Therefore, in times of geopolitical uncertainty, it was even harder to attract investments,” said Gavish.

Over the past two and a half years, local startups and tech companies continued to run their businesses, despite fundraising challenges, as they sheltered from rockets and as many of their executives and employees were repeatedly called up to reserve duty following the outbreak of war with the Hamas terror group on October 7, 2023, which spread to multiple fronts.

Gavish noted that, globally, 2025........

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