Tech continues to drive Israel’s economic resilience, but beneath the surface the ecosystem is showing signs of strain and health tech is feeling the pressure most.
The announcement of clinical AI company Aidoc's recent $150 million raise, backed by General Catalyst, Square Peg, nVentures (NVIDIA’s venture capital arm), and four major U.S. health systems, is a sign of what is still possible: when the science is solid, the platform is ready, and the value is global, capital will follow. This is proven by the over 45 million patients currently benefitting from Aidoc's integration across more than 150 health systems.
Aidoc’s success is an outlier today, but it should be the model.
As the largest sector in Israeli innovation, with over 1,600 companies, health tech should be a source of strength. Instead, in the first half of 2025, it drew just $630 million in private funding — the lowest total in five years. Median deal sizes are shrinking, and time from seed to Series A has stretched to 54 months, pointing to deep structural challenges rather than a short-term slowdown.
Capital is flowing elsewhere, toward sectors with faster cycles and clearer paths to scale. Cybersecurity raised $2.2 billion with a median round size of $25 million in H1 2025, while business software led all sectors with $3.2 billion. Health tech is struggling to compete for attention, investment, and talent.
These trends are part of a broader shift. Israel’s global innovation position is narrowing, infrastructure hasn’t kept pace with the needs of deep tech, and overreliance on a few sectors is leaving others under-supported. Talent shortages and limited access to global markets are compounding the pressure.
At Startup Nation Central, we are seeing this firsthand. Through our work with the 8400 The Health Network Health Network and across the ecosystem, the signals are clear. Health tech is underfunded and underprioritized at a time when its relevance has never been greater.
Still, the fundamentals are here. Israel has a strong scientific foundation, a deep pool of entrepreneurial talent, a world-class healthcare system, and health professionals with a track record of innovation. Add to that a growing global demand for health solutions, and the potential is clear. With targeted investment, a renewed focus on translational research, and the right strategic partnerships, health tech can not only recover but take the lead as Aidoc has.
The opportunity is real and so is the urgency to act on it.