Tel Aviv: Viola Ventures has unveiled two new investment funds totalling about US$250 million, a move the firm says reinforces its long-term commitment to Israel’s tech ecosystem across both early-stage and growth-stage companies.
At the center of the announcement are two vehicles designed for very different moments in a startup’s life. The first, Viola Conviction Fund I, is a dedicated secondary fund of around US$100 million that will invest in existing portfolio companies, a structure typically used to create liquidity and extend support to mature assets at a time when late-stage funding is described as selective.
Alongside it, the firm’s seventh flagship vehicle, Viola Ventures VII, has reached its first close and will focus on seed, Series A and incubation-stage startups. While investments from the previous fund are still ongoing, Viola Ventures VII is scheduled to formally launch in early 2026 and is expected to back roughly 20 new investments.
Viola Ventures taps Israel’s AI and deep-tech boom
Viola says the new early-stage fund will target high-growth themes including vertical AI, enterprise AI, AI infrastructure, fintech, cybersecurity, quantum technologies, and defense tech.
The firm is positioning the strategy within a broader wave of AI and deep-tech capital formation in Israel. The report notes that Israel has 342 generative AI startups that have collectively raised more than US$20 billion, and that deep-tech companies raised over US$28 billion between 2019 and 2025.
Why this launch is landing now?
The fundraising arrives as the domestic venture market shows signs of strain. New startup formation has fallen from over 1,000 companies a decade ago to about 500 in 2024.
It also points to smaller average VC fund sizes, down from about US$90 million in 2017–2022 to US$60-65 million in 2023–2025 and adds that Israel’s high-tech output has plateaued at 17% of GDP, while R&D employment declined by 6.5%.
In that backdrop, Viola’s approach, pairing a liquidity-focused secondary fund with a fresh early-stage pool, reads like a bid to cover both ends of a market that is taking longer to clear: supporting mature winners without forcing rushed outcomes, while staying active in new company creation and early conviction.
Who’s leading the funds?
The funds will be led by Omry Ben David, Zvika Orron, and Viola co-founder Shlomo Dovrat, supported by an investment team that includes Alex Shmulovich, Tal Abuloff, Alon Cinamon, and Assaf Shriber.
The longer-term capital of Viola and its earlier-stage approach may offer opportunities to the corporate venture groups, cloud companies, and cybersecurity companies to invest jointly in the markets prior to the completion of the entire fund in 2026.
With the market having relatively fewer startups entering on the one hand, and the checks in the latter stages of investment becoming tighter, Viola Ventures is essentially creating a two-track machine that focuses on not only ensuring that the mature startups stay liquidity-rich, but also continues to bet on the next big trends in the form of Artificial Intelligence and Deep Technologies that are going to shape the future of the next investment cycle in Israel.
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