Interfax-Ukraine
14:34 09.05.2025

Author OLEG VYSHNIAKOV

A Startup Nation Under Fire: How War Didn’t Halt Venture Investment in Israel—and What Ukraine Can Learn

3 min read
A Startup Nation Under Fire: How War Didn’t Halt Venture Investment in Israel—and What Ukraine Can Learn

Oleg Vyshniakov, businessman, Honorary Consul of the State of Israel in the Western region of Ukraine

 

We constantly seek answers to pressing questions: How do we survive in a state of ongoing danger? How do we make strategic decisions amid instability, anxiety, and uncertainty?

Israel offers a unique example. While sirens wail across the country and thousands of reservists leave their workplaces, startups continue to grow, and venture capitalists keep investing in the future. Not out of patriotism—but because they believe that the future is being built there.

War is nothing new for Israel. But 2023 and 2024 proved especially challenging: the Hamas attacks, mass mobilization, and economic pressure. And yet, investment in technology—particularly in AI and cybersecurity—has grown. How is that possible? And what lessons can Ukraine take from this?

Startups Under Pressure: What Happened in 2023–2024

In October 2023, following a devastating Hamas attack, Israel announced a large-scale mobilization. Over 350,000 reservists were called to service, among them thousands of IT specialists, engineers, and startup founders. It seemed the innovation ecosystem might grind to a halt.

But the opposite happened. According to The Times of Israel, total investment in Israeli cyber startups reached $4 billion in 2024—twice as much as the previous year. Overall venture funding exceeded $12 billion, marking a 31% increase from 2023.

Key focus areas: artificial intelligence, cybersecurity, defense technologies, and healthcare. For instance, AI21 Labs—a company developing large language models (similar to ChatGPT)—raised $300 million in a Series D round in 2024.

This isn’t coincidence—it’s a strategic system.

Survival Factors: What Helped the Market Stay Afloat

  1. Government Support for Innovation

    The Israeli government quickly adopted an emergency support package for the innovation ecosystem. Through the Israel Innovation Authority, $100 million was allocated to support startups affected by the war. This helped companies stay afloat, retain staff, and stay focused on R&D.
     
  2. Focus on Critical Sectors

    Investors didn’t just keep funding—they shifted focus. The boom in cybersecurity, defense tech, AI, and medical innovation is a direct response to urgent challenges. Technologies that enable fast adaptation and protection are now top priorities.
     
  3. Global Investor Confidence

    Despite the crisis, global funds remained interested in Israeli startups—a testament to their long-standing reputation. Investors know that even in crisis, Israeli teams work quickly, efficiently, and with technical excellence.
     
  4. A Resilient Entrepreneurial Culture

    In Israel, entrepreneurship is part of the national identity. Failure is not stigmatized—it’s seen as experience. So even in harsh conditions, people continue building. Even under fire.
     

Why This Matters for Ukraine

Like Israel, Ukraine is at war. And we too must rebuild our economy during wartime—attract investors, retain talent, launch new solutions. Israel’s experience isn’t just inspiring; it’s a practical roadmap for what can be done:

  • Prioritize funding for defense and critical technologies.
     
  • Launch special government programs to support small businesses and innovation.
     
  • Communicate with global investors not from a place of pity, but with confident strategy.
     
  • Foster an entrepreneurial culture where risk is normalized.
     

Looking at Israel’s story reveals a deeper truth: war is not only about destruction. It’s also about rethinking, redefining, mobilizing creative energy. When old playbooks collapse, new ones can be written.

The startup nation survived not because it was easy—but because it chose to believe that the future matters more than fear. Growth is a form of resistance. Innovation is a form of faith. And in that choice lies immense power.

Ukraine has every opportunity to follow the same path. If we can keep creating—even in the darkest times—we will win. Not only on the battlefield.

 

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