Gulf investment in Israel’s tech sector runs deeper than headline figures imply, shaped by indirect funding channels, post-normalization of Israel UAE relations, and a growing alignment between regional innovation ecosystems, according to Startup Nation Central’s 2025 annual report.
On the surface, the Gulf Cooperation Council ‘s (GCC) footprint in Israel’s tech is modest, characterized by small deal size and volume disclosure. However, the Startup Nation Central’s Annual Report 2025 argues that this reading at face value misses an important, indeed less visible, layer of regional engagement tied to Israel UAE relations, indirect investment, political realities, and long-term strategic interests.
How Gulf Capital Really Moves
In 2025, private investment in Israeli tech reached $16.7 billion, even as the number of funding rounds declined, reflecting a shift toward fewer, larger, later-stage deals. Within that broader trend, Israel GCC-linked participation appears concentrated in early-stage rounds with small, disclosed tickets.
Read narrowly, that suggests caution. Read closely, that signals structure shaped by economic ties between Israel and GCC.
According to Startup Nation Central, much Gulf investment flows through international venture capital funds and offshore family offices, making it difficult to attribute capital directly to the region or to evolving Israel and UAE relations.
“What I want to say is there is much more investment coming from the Gulf than the numbers that you see here,” said Vice President for business development and partnerships at Startup Nation Central, Yariv Becher.
“These are only things that we can say that come directly from the Gulf,” showing how Israel UAE relations extend beyond disclosed data.
The UAE stands out statistically because it can invest openly, reflecting a distinct dynamic in UAE on Israel engagement.
“One is the fact that we have normalization, we have diplomatic relations, and so we can trade, and they can invest directly,” Becher said, describing how Israel and Gulf countries operate under different visibility thresholds.
Investors from Saudi Arabia, he added, are already active but typically take indirect routes, reinforcing how GCC Saudi Arabia and Israel remain connected beneath the surface. A pathway shaped by Gulf countries and Israel realities.
Ecosystem Fit, Not Just Capital
The report places this hidden Gulf activity within a booming Israeli tech landscape. Israel’s tech industry generated more than $111 billion in capital deals in 2025, nearly quadruple the previous year, driven by mergers, acquisitions, and public offerings.
Private funding reached $16.7 billion across 801 rounds, while M&A value totaled $82.3 billion, underscoring a maturing ecosystem that aligns with Israel GCC interests rather than sheer volume.
For Becher, the appeal goes beyond returns.
“It’s only natural that they would look at Israel as a potential partner,” a logic deeply rooted in Israel UAE relations. Israeli firms, he explained, often validate products in the US before turning to the UAE as a platform for regional scaling, reinforcing Israel and UAE relations at the operational level.
Sectoral focus reflects this logic. Cybersecurity and business software dominate financially, while agri-food, water, energy, climate, and health technologies align with Gulf structural needs across Israel GCC markets.
“Part of the motivation to normalize relations with Israel is to have access to Israel’s innovation ecosystem,” Becher said, citing solutions, financial gains, and exposure to entrepreneurial culture shaping Israel UAE relations.
While mistrust and misalignment persist, especially after October 7, Becher argues the depth of engagement built since the Abraham Accords has proven resilient, with Israel UAE relations and Israel and Gulf countries cooperation continuing much of it unfolding quietly, beyond what the data alone can show.
Inside Telecom provides you with an extensive list of content covering all aspects of the tech industry. Keep an eye on our Tech sections to stay informed and up-to-date with our daily articles.