Funding for Israel’s climate tech sector plummeted in 2023. In the first half of the year, venture capital investments fell 60 percent compared to 2022 to just $551 million.
In the second half of 2023, there were only 13 deals totaling $96.07 million, according to data from Pitchbook.
After Prime Minister Benjamin Netanyahu’s government introduced a controversial bill that weakened the powers of the country’s Supreme Court, investors reduced their funding in the first half of the year – and many Israeli startups moved their operations abroad.
Israel’s climate tech sector is experiencing massive growth
By 2023, Israel’s climate tech sector had experienced massive growth. Data from the Israel Innovation Authority shows that the number of climate tech start-ups has been increasing every year since 2018 – in 2022 there were a total of 694 start-ups, while in 2023 there was an increase to 784.
Overall, global funding for the climate tech sector collapsed in 2023, falling 50 percent year-on-year after being relatively independent of external factors for a while. This has likely contributed to Israel’s slump in climate technology funding.
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After the Hamas attacks on October 7, 300,000 Israelis – many in the industry – were ordered into the reserve by the Israel Defense Forces. Others were forced to run their businesses with a decimated workforce and employees mourning the dead.