Photo Credit: Courtesy of the Israel Innovation Authority
637 Israeli companies are engaged in developing technologies that contribute to decarbonization, mitigation, and adaptation.

637 Israeli companies are engaged in developing technologies that contribute to decarbonization, mitigation, and adaptation. Three-quarters of these startups are younger than 7 years and have fewer than 10 employees, according to a new report of Israel’s Innovation Authority, Israel’s State of Climate Tech 2O21. The number of newly established climate tech-related startups surged in 2014 and, since then, their share of all newly-founded Israeli startups has increased each year, reaching 9% in 2020.

According to the report, Israel was shown to hold absolute global leadership in the areas of cultivated meat, irrigation systems, and water desalination. When normalizing the results by GDP spending on R&D, Israel also holds a position of global leadership in the entire alternative proteins domain as well as in precision agriculture, sustainable mobility, and solar power.


However, a comparison between the success rate for Israeli Green Deal submissions with that for all Horizon programs, indicates that Israel is far from realizing its global potential in Europe’s largest climate funding program. Despite demonstrating a growing ecosystem, Israel has yet to exhaust its potential for innovation, commercialization, and scaling up of climate tech solutions.

A survey conducted among Israeli climate tech companies revealed that the main challenges to growth are access to capital, regulatory hurdles, and the difficulties of market scale-up opportunities. The report concludes with several recommendations for overcoming these challenges and further facilitating the continued growth of climate tech companies in Israel. These include pathways to increase access to private and public capital, increasing commitment of government and regulators, engaging the varied stakeholders in the ecosystem, and showing leadership by adopting an overall vision for a carbon-neutral Israel. A strong governmental mindset and leadership are instrumental in creating strong momentum and transforming Israel into a global leader in climate tech innovation.

According to the report’s findings, beginning in 2014 there was a leap in the number of new startups dealing with climate issues in Israel, with their number reaching a peak in 2016. The proportion of these new climate companies out of the total number of new high-tech companies increased considerably, reaching nine percent of the total companies established in 2020.

Here are the report’s main findings:

There are 637 startups and growth companies developing climate technologies, and the five challenge areas are Climate Smart Agriculture, Clean Energy Systems, Sustainable Mobility & Transport, Eco-Efficient Water Infrastructure, and Alternative Proteins. Most of these innovative companies are young, up to seven years old, with up to 10 employees.

Until today more than 560 private investment entities have invested in Israeli climate companies, mostly venture capital funds, out of which two-thirds are foreign investment entities.

These same entities invested a total of 2.97 billion dollars between 2018 and 2020. The total investments in the first half of 2021 amounted to 40 percent of the total investments in the three previous years.

However, out of the 20 leading investment entities in Israeli climate technology, there is no single entity dedicated to climate technologies. Moreover, in Israel, to date, there is no dedicated climate tech investment group. In addition, the Israeli government invests significantly in climate companies.

From 2018-2020, led by the Israel Innovation Authority, the state invested a total of $280 million in promoting climate tech research & development.

A special survey that was commissioned for this report, in which close to 200 Israeli climate companies participated, found that the most significant challenge for Israeli climate companies is securing funding. 72 percent of the surveyed companies noted that today, access to capital is the main challenge to their growth.

Israel in comparison with the world – Israeli technologies are found at the top of the list of countries (G20) operating in the following fields: cultivated meat, irrigation systems, precision agriculture, and water desalination. However, Israel is far from fulfilling its potential as reflected in its relatively low rate of participation and success in the Horizon Program.

The report identified four challenge areas with significant potential for Israeli climate innovation:

  • Clean Energy Systems: 235 companies, of which 119 startups raised $2 billion. Energy Storage was identified as a field with especially high potential, with 34 startups that raised $265 million.
  • Climate-Smart Agriculture: 212 companies, of which 130 startups raised $950 million. Precision Agriculture was identified as a field with especially high potential, with 69 startups that raised $489 million.
  • Sustainable Mobility & Transport: 127 companies, of which 75 startups raised $1.8 billion. New Mobility was identified as a field with especially high potential, with 69 startups that raised $1.19 billion.
  • Alternative Proteins: 45 companies, of which 42 startups raised $364 million. Cultivated Meat was identified as a field with especially high potential, with five startups that raised $185 million.

According to Dror Bin, CEO of the Israel Innovation Authority, “the climate crisis is the most significant global threat facing humanity. While several activities are taking place at an international level, the eyes of the entire world are looking to the technology sector to produce innovative and ground-breaking solutions to reduce greenhouse gas emissions and deal with the consequences of the crisis. Climate innovation is not just an important stage in the war against the climate crisis, but also a significant business opportunity for the growth of an innovative, diverse and sustainable technological industry.”

Climate Tech Investments

  • Investments in climate ventures totaled $2.97 billion during 2018-2020, demonstrating a compound annual growth of 14%. Initial data suggests that the total capital invested in climate tech startups during the first half of 2021 was nearly 40% more than the total amount invested during the previous 3 years.
  • The two climate challenges which attracted the most funding over these years were Clean Energy Systems and Sustainable Mobility & Transport. Alternative Proteins displayed promising growth in raising capital.
  • 2020 saw a surge in Initial Public Offerings (IPOs) conducted by climate tech startups on the Tel Aviv Stock Exchange. Five startups, primarily from the energy sector, conducted a public offering (25% of total IPOs in 2020), while 11 have already filed IPOs during the first 3 quarters of 2021.

Climate Tech Investors

  • Israeli climate tech attracted almost 570 investment groups and a significant number of additional private investors.
  • Of the 20 investment groups that have invested the highest total amounts in Israeli climate tech startups – none are dedicated climate funds. Moreover, in Israel, to date, there is no dedicated climate tech investment group.
  • Of the 10 most active investment groups in Israeli climate tech, 4 are operating a government-supported incubator, thereby highlighting the importance of such government support in the climate domain.
  • Four of the most active investors in the global climate tech space (both in the number of deals and the amounts invested),12 have invested in Israeli climate ventures (SOSV, Sequoia, Khosla Ventures, and Techstars).
  • Less than 20% of the 570 investor groups are attributed to corporate venture capitals (CVCs). Late-stage dedicated funds conducted less than 1% of the active investments, thus demonstrating the low level of capital diversity available for climate ventures.
  • The Israeli government invested more than 280 million USD during 2018-20 in promoting R&D in climate tech startups.
  • Israel Innovation Authority (IIA) supported 290 ventures with a total budget of $250 million during 2018-20 (16% of its annual budget).

Previous articleDays Off For Yom Tov In America
Next articleReport: Yamina’s Knesset Coalition Chairwoman Seeking Future with Yesh Atid
David writes news at