For the third consecutive year, Tel Aviv has been ranked the world’s fourth most valuable startup ecosystem, with a value of $250.3 billion, according to Startup Genome’s 2026 Global Startup Ecosystem Report (GSER). The report was unveiled this week at the VivaTech conference in Paris and shows the Israeli city behind only Silicon Valley, New York and London.
Strong subsectors included cybersecurity, which the report called “a defining pillar of Tel Aviv’s innovation economy”; AI, big data & analytics, highlighting Apple’s acquisition of AI startup Q.AI for nearly $2 billion; and life sciences, reinforced by research institutions, international partnerships, and sector convenings that connect startups with investors and clinicians.
Tel Aviv Mayor Ron Huldai described the city’s innovation as “part of the identity of the city and its way of life,” crediting the municipality’s continued efforts “to support, assist and be home to the leading Israeli startups driving the global industry, as well as to some of the most important and largest international companies in the world.”
Startup Genome founder and president Marc Penzel added: “What sets Tel Aviv apart globally isn’t just its ranking, but the concentrated depth of talent and innovation driving it—especially in AI and big data, cyber and life sciences. Holding the world’s 4th place year after year signals an ecosystem that has built a sustained competitive advantage in the sectors defining the evolving global economy.”
That assessment lines up closely with Israel’s own economic data. The Israel Innovation Authority’s latest State of High-Tech report found the sector grew 8.2% in real terms last year, with high-tech alone accounting for roughly half of Israel’s total economic growth in 2025 and contributing 1.44 percentage points of the country’s 2.9% GDP expansion, even as the country perseveres through wartime.
The report also cites comments from billionaire investor Bill Ackman, praising Israel’s ability to overcome challenges:
“In Israel’s case, the value of its assets, particularly intellectual assets, far exceeds its liabilities. This is a country that has proven itself extraordinarily over the last two years, both militarily and technologically,” he said.
Capital markets are sending a parallel signal: a report from Fusion VC found that valuations for the most competitive pre-seed startups rose 17% year over year, reaching an average of $13.5 million, as investors compete intensely for the strongest AI and cybersecurity teams.
Government policy is moving to reinforce that private-sector momentum rather than chase it away.
The report highlighted how, in July 2025, the Israel Innovation Authority launched a process to establish new state-backed technological incubators, and in January 2026 announced a $280 million national AI supercomputer initiative to provide high-performance computing infrastructure for startups and research labs.
JNS reported this month that the government has approved a national plan to cement the country’s standing as “a global AI superpower”. Israeli Prime Minister Benjamin Netanyahu framed the ambition as one that would match previous success, pledging to do with AI what “Israel’s human capital” did with cyber. The plan sets a national target of 100,000 processing units and commits to a sovereign quantum computer built on Israeli-developed technology.
Startup Genome ranked Tel Aviv fifth globally for AI-native startup activity, reflecting the growing role of artificial intelligence in the city’s innovation ecosystem and showing promising signs of the state-level bet to become a “Systems Nation” to build the national-scale infrastructure, compute and sovereign capabilities on which startups depend.
The report draws on more than a decade of independent research and a global partnership spanning over 65 countries. The methodology includes studying more than 5.5 million companies across 350+ startup ecosystems, combining data from the three leading venture funding databases, and cleaning with an AI engine, machine learning techniques and a manual review.
Startup Genome has worked with 221 clients across six continents and 71 countries to help accelerate startup success and ecosystem growth.
