Annual funding for the Israeli tech industry is expected to have fallen by nearly half in 2023 after a planned judicial reform and war with Hamas in Gaza deterred many investors, an annual report by Startup Nation Central found.

But the group that coordinates global organisations with Israel’s innovators said the figures showed investor appetite was still robust and it was cautiously optimistic for the coming year, according to Reuters.

“We hope the ecosystem’s bedrock of innovation, global partnership, and proven resilience will steer it through uncertainty toward a continued growth trajectory,” Start-Up Nation Central CEO Avi Hasson said in a statement.

Once undisclosed rounds have been included, private funding for Israeli tech is expected to have hit nearly $10 billion in 2023, back down to prepandemic levels and down from the nearly $19 billion it received in 2022, the report said.

The high-tech sector drives Israel’s economy and accounts for 12 per cent of employment, more than half of Israel’s exports, 25pc of income taxes and nearly a fifth of its overall economic output.