Foreword

Since 2021, when PLANETech – a non-profit innovation community – and the Israel Innovation Authority – a government agency – collaborated to publish the first “Israel’s State of Climate Tech” report, much has changed, and the landscape has evolved significantly. The report not only documented the existing ecosystem but also helped establish a climate tech identity for Israeli entrepreneurs, inspiring stakeholders to collaborate in advancing Israeli climate tech innovation.

The impact of that report continued in 2022 and 2023, reinforcing the principle: “What cannot be measured cannot be managed.” Since 2021, thousands of new players have joined the ecosystem – entrepreneurs, investors, corporations, policymakers, and researchers. The growing Israeli ecosystem reflects a maturing field with stronger collaboration across sectors.

Since our last report, Israel’s wartime status has introduced challenges to the local ecosystem, from absent team members to significant travel restrictions. Nevertheless, the ecosystem has shown resilience. Entrepreneurs continue to launch and scale climate tech startups, driving innovation despite uncertainties. At the ecosystem level, new initiatives are emerging to support founders and ensure continued momentum, reflecting the sector’s adaptability.

The global climate tech environment has changed. In 2024, total investments in climate tech surpassed 2023 levels but remained below previous record highs. This suggests a recovery from the effects of high interest rates and an adjustment to a “new normal”¹Sightline Climate. (2024). Climate tech investment trends: 2024. [Report].. While the number of deals has declined, we are seeing more mega-rounds, where companies raise hundreds of millions to support their growth. The role of non-dilutive financing is also expanding, enabling the scale-up of climate tech projects and signalling that many sectors are becoming mainstream.²Net Zero Insights. (2024). State of climate tech 2024. [Report].

Climate is changing, every year has been warmer than the previous, culminating in 2024, when the global average temperature surpassed the Paris Agreement’s 1.5°C threshold above pre-industrial levels³Copernicus Climate Change Service. (2024). The 2024 annual climate summary: Global climate highlights 2024.. The urgency to reduce greenhouse gas emissions, along with growing awareness of the costs of global warming, has made reliable data and insights more crucial than ever.

The uncertainty of global geopolitics continues to shape climate action. The withdrawal of the new U.S. administration from the Paris Agreement and the insufficient budget allocations at COP29 raise concerns about the world’s ability to meet climate targets.

Despite these shifts, the Israeli climate tech ecosystem continues to thrive, attracting top talent, investment, and partnerships. Its resilience in the face of adversity highlights the strength of its foundations and its crucial role in shaping the future of global climate innovation. We are happy to continue providing the ecosystem with the data it needs to grow and develop. As with past reports, we have implemented new research methods to map the ecosystem more accurately, ensuring that this report serves as a valuable tool for all stakeholders.

Contributors:

PLANETech is a nonprofit climate tech innovation community – a joint venture of the Israel Innovation Institute and Consensus Business Group. PLANETech aims to lead the Israeli and global climate tech ecosystem in tackling climate change via a combination of approaches. This is done by modifying business focus and technologies towards climate change challenges, supporting the deployment and implementation of innovative climate technologies, and by building a global network for climate tech innovators while promoting Israel as a world center for climate change technologies.

The Israel Innovation Authority, an independent publicly funded agency, was created to provide a variety of practical tools and funding platforms aimed at effectively addressing the dynamic and changing needs of the Israeli Tech hub. Its target audience includes early-stage entrepreneurs, mature companies developing new products or manufacturing processes, academic groups seeking to transfer their ideas to the market, global corporations interested in collaborating with Israeli technology, Israeli companies seeking new markets abroad, and traditional factories and plants seeking to incorporate innovative and advanced manufacturing into their businesses.

The report was written by
Noam Sonnenberg and Dr. Yaroslav Efimov of PLANETech; Ronit Eshel and Aviv Berkovich of the Israel Innovation Authority.

Special Thanks to the valued contribution of Israel Innovation Authority’s Finance & Reserach; Technological Reserach; International Collaboration and ISERD

For follow up inquiries please contact PLANETech at [email protected]
and Israel Innovation Authority at [email protected]