A new report collated by F2 Capital and derived from a survey of 25 early-stage VCs in Israel (together with our enter at Remagine Ventures), analysed funding traits for pre-seed in 2024 and reviewed the expectations for 2025. The report highlighted the resilience of Israeli startups regardless of the geopolitical challenges and shared the curret sentiment on traits in pre-seed offers.
Beneath are the important thing findings. The hyperlink to the complete report might be discovered on the backside of this put up.
Key findings from the report:
- Pre-seed funds have been energetic in 2024: Pre-seed investments have been energetic in 2024, with traders closing a mean of 4.4 offers per fund, with a mean test measurement of $840,000.
- Velocity is the secret: over 77% of pre-seed investments have been executed in the middle of 2-3 weeks to a month
- The YC Impact? SAFE agreements have been utilized in 94% of pre-seed offers. This has now turn into the norm for pre-seed. In distinction, 80% of seed rounds are equity-based.
Equally, as AI is so prevalent in pre-seed offers, it turned the norm, and traders anticipate to see the moat much less within the know-how and extra within the go to market.
“Since AI lowered the technological moats for many firms, we put extra deal with GTM talents and scaling potential.”
- AI’s Affect is all over the place: AI considerably influenced funding methods, with 87% of traders reporting that 75-100% of their pre-seed investments have been in AI-driven startups. Equally, 74% of traders reported that 75-100% of their seed investments have been in AI-driven startups. Traders are extra cautious and deal with defensible AI use instances and GTM talents. That being mentioned, basis Fashions are quickly commoditising.
- The bar for Seed has moved up: Seed rounds noticed rising expectations, requiring founders to exhibit traction and powerful unit economics. Traders closed a mean of three.5 seed offers with a mean test measurement of $3M. Most seed investments closed inside a month, with 2-3 weeks being frequent. Fairness-based offers accounted for 80% of seed offers. To me this solidifies the necessity for pre-seed rounds: enabling the founders to construct the early crew, get to MVP and iterate rapidly to get these early metrics in place.
- Sector Developments: The report identifies untapped potential in DevOps, resilience in Protection Tech and Vertical AI, and a plateau in some areas of Cybersecurity. It additionally notes that consumer-facing generative AI apps with low technical boundaries could also be overvalued.
Vertical AI will proceed to achieve momentum resulting from Israel’s technical expertise and trade experience.
- Shifting Expectations: Founders are searching for bigger seed rounds, whereas traders are demanding higher effectivity and tangible traction. A twin market is rising, with powerful fundraising situations in some domains and important capital flowing into areas like AI infrastructure and Cybersecurity.
Why is now an thrilling time for early stage investing in Israel
General, this report highlights the resilience and adaptableness of Israel’s early-stage ecosystem. At Remagine Ventures, we imagine that the mixture of world-class technical expertise, entrepreneurial grit, and sensible AI purposes creates distinctive alternatives.
Israeli founders are capitalising on the stronger foundations out there to ship AI merchandise, and deal with the US market virtually from day one. This surroundings, significantly in utilized AI the place Israeli startups excel at fixing actual enterprise issues, presents compelling alternatives for traders who perceive the best way to navigate this market.
Learn the full report right here.
I am a former normal accomplice at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first bodily hub for startups.
I am additionally the founding father of Techbikers, a non-profit bringing collectively the startup ecosystem on biking challenges in assist of Room to Learn. Since inception in 2012 we have constructed 11 colleges and 50 libraries within the growing world.
