Message From The Team
The numbers are in and Israeli tech maintained its momentum in Q1 2025. Startups raised $2.6 billion and exits reached a record $35.7 billion—driven by Google’s landmark $32 billion acquisition of Wiz and Munich Re’s $2.6 billion purchase of Next Insurance.
This month also saw top Israeli tech publications release their annual rankings of the most promising startups. We’re happy to see Parametrix (F2 II) and 257 (F2 III, Operators Fund) featured by Calcalist, following last year’s recognition of Faye, Darrow, Astrix, and Zero Networks. In addition, Globes named Astrix to its list of Israel’s top startups for 2025.
Even in a cautious market, major deals are happening across all stages and bold startups with strong fundamentals are seizing the opportunity.
Sector Spotlight
AI innovation is accelerating—but so is its energy footprint. According to the International Energy Agency (IEA), electricity demand from data centers is expected to more than double by 2026, with AI accounting for a major share of that growth. Training and deploying large models—especially for compute-intensive applications like video generation, multi-agent systems, and real-time inference—is pushing global infrastructure to its limits. In the US, data centers could soon consume more electricity than the entire United Kingdom.
Yet this looming energy crunch is also a trillion-dollar opportunity. AI isn’t just stressing the grid—it’s beginning to rewire it. From predictive maintenance and smart load balancing to autonomous grid orchestration and AI-optimized energy storage, intelligent systems are already transforming how energy is produced, distributed, and consumed. As demand surges, we see massive potential for startups building at the intersection of AI and energy.
F2 Portfolio News
- Sett announced their Series A led by Bessemer Partners to scale agentic AI platform for performance-driven content in mobile gaming.
- Regulus appointed the former president of Rafael Advanced Defense Systems USA to its board as demand grows for its leading counter-drone platform.
- Astrix launched a first-of-its-kind AI agent security product and won two global InfoSec Awards at RSAC 2025.
- At F2, we made a new investment in an AI powered game studio.
What We Are Reading
Calcalist Unveils 2025's Top 50 Most Promising Israeli Startups | Calcalist
Nvidia’s Dominance Reflects the CEO’s Unique Business Logic | WSJ
Amazon's $100 Billion Bet on AI with Project Rainier | Time
What Warren Buffett Learned from His Biggest Hits—and Misses | WSJ
A Judge Just Blew Up Apple’s Control of the App Store | The Verge
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