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2022 Year in Review: Data Investments in Israel

Aviad Harell April 13, 2023
Blog Post Data Investments

The Israeli data ecosystem is alive and well, even with cross-sector slowdowns in the Israeli and international tech industry. Israel’s world-renowned data companies still managed to raise impressive capital in 2022 and are set up to thrive in the years to come. Below, we have identified several key trends pushing the data ecosystem forward in Israel, along with major deals over the last year and some emerging stars from the local scene.

Total data investments diminished, but the average deal size is skyrocketing

While overall investment in the Israeli data ecosystem decreased between 2021 and 2022, the scale of investment made during the last 12 months still exceeds previous years’ records, reaching $944 million spread across 24 deals.
Despite the market slowdown, which was represented by a decrease in total funding and a fewer number of deals, we observed a positive indicator for the Israeli data companies – the average deal size broke the previous years’ record, reaching $39.3M – exceeding even 2021’s highs.

Data 1

The resilience of early-stage data companies on full display

While the total amount of capital and number of deals decreased for Israeli data companies in 2022, early-stage investments (seed and series A) had a record year.
Surprisingly, we observed a more significant YoY Growth for seed and series A investment in 2022 than in 2021 – the funding for these early-stage data companies grew 23% to $74M in 2022.
While the number of deals decreased, the average size of early-stage deals reached a peak of $9.3M over the period. This finding, similar to what we observed for the average deal size for all data companies (at any stage) is a sign of strength for the Israeli market. This resilience and sustainability for Israeli data companies will enable them to continue spearheading the next wave of data innovation.

Data 2

Leading players in the Israeli data ecosystem in 2022

Companies were able to raise a handful of larger rounds over the past year, despite deteriorating macroeconomic conditions. The year was highlighted by Israeli-founded Weka Technologies,raising $135M in capital.
2022 also saw an impressive exit – the sale of Databand to IBM for $150M.

Data 6

Israeli data innovation tackling major industry pain-points

2022 saw strong investment in Israeli companies building components of the modern data stack, and this will continue into 2023 and the foreseeable future.
Looking forward, 2023 is being dubbed the year of generative AI. Multiple innovative Israeli companies are leading in the space with AI21 Labs’ recent release of the Jurassic-2 model and DataGen’s synthetic image data. Data platforms have begun to emerge as a category to simplify and bundle components of the data stack. Additionally, companies have begun to emerge targeting a more comprehensive form of metadata activation that extends further than traditional data cataloging solutions.
As for funding categories trends, AI platforms such as Weka, Run:AI, and Blackswan Technologies saw success as pioneering companies in the domain. Augmented analytics also saw significant attention with Pecan, and Noogata raising major rounds.

Data 4

Looking forward

The rise of the modern data stack has led to significant growth in the data industry in recent years. We believe that Israeli innovation, alongside the resilience of early-stage investments will continue to define Israel’s position as a leading data powerhouse in the long term.

Click here to explore the global data ecosystem with Team8’s data market map.

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