There is no other way to describe the capital-raising journey the Israeli startup ecosystem has seen in recent months other than a roller coaster. Every month we seem to be in a different place: sometimes we’re up, sometimes we’re down. September was no different.

Youngin's are celebrating

During September, Israeli startups reported raising a total of approximately $843 million– an amount that is significantly lower than those of August, June, and May but is more reminiscent of what we saw in July and April. Did we or didn’t we say roller coaster? This month, 37 Israeli startups reported raising capital, a respectable number by all accounts, and the celebration is led by young startups. In September, 25 young startups (in pre-seed to A rounds) reported raising capital and made up two-thirds of the companies that reported raising funds, compared to 12 veteran companies (equating to one-third) that raised as well.

This division, as expected, has a significant impact on the total amount raised because young companies often raise lower amounts compared to the mature companies (Series B and above), despite some relatively unusual rounds such as the $34 million seed round by Ox Security that we saw this month. This is a continuous trend for the last few months since the effects of the economic crisis on the market began. As part of this trend, we see more checks given to the younger companies compared to the older ones. This is happening for two reasons: The first is because newer startups get smaller checks and two, larger companies must show their progress before investors are willing to give them their money– which does not always happen.

The 'Jewish Holiday Month' syndrome

We went back and checked the capital raisings in September of the last three years, and we saw that the results varied in terms of the amount – but there is one fairly similar trend: the number of transactions reported. In 2021, 36 startups reported raising capital and in 2020, 37 companies reported raising capital. In 2019, the number was lower, with 31 companies reporting recruitments during the month of September. The reason for these figures is simple: The Jewish New Year holidays.

Israeli startups ideally want to advance and report on capital raised before the holiday break, as many people take this time to go on vacations; moreover, with all the holidays interrupting our schedules, be it mandatory family meals, or the fact that our kids don’t have school, this time of year is generally slow. In terms of the fundraising amounts, last year was of course exceptional and therefore the amount raised (more than 2 billion dollars) is unusual when compared to the grand scheme of things. However, in 2020 and 2019 there were relatively similar amounts to the one reported this September.

Technology giants open their pockets

Alongside this month's recruitments, we also saw a relatively good number of exits. We saw 4 exits this month, all made by large companies. First, Samsung announced the acquisition of the Israeli startup Caaresys through its automotive arm (HARMAN). Then Zynga, Crowdstrike and Google joined the party after having acquired Stormhaven, Reposify and Breezometer respectively.

Capital raised in September 2022

The September 2022 exits