Comprehensive research conducted by EIT Hub Israel - the Israel Center of Innovation of the European Institute of Innovation & Technology (EIT), an EU organization, Planven VC Fund and consultancy firm KPMG, reveals that over the past three years, Israeli tech companies have significantly increased their activities in Europe, with more than 30,000 employees throughout the continent and annual growth of 4.8% in the number of employees.
According to the findings, most Israeli companies operating in Europe have chosen to base their operations in the EU, with Germany, Spain and France serving as the main innovation hubs. The study also emphasizes the development of Eastern and Central Europe as important centers of activity, with Poland, Romania and the Czech Republic serving as cost-effective operational bases for engineering and shared services centers; and also mentions certain countries such as Lithuania, Bulgaria and Romania, where Israeli companies are setting up large service centers with hundreds of employees, and thus creating major centers of employment.
Mature, innovative and diverse
The study depicts a clear and sometimes surprising picture of the profile of Israeli companies operating in Europe. Thus, it reveals that R&D departments comprise about 40% of the workforce employed by Israeli companies in Europe, which highlights the focus of Israeli tech on innovation. Sales and customer service departments make up the second biggest component, reflecting the Israeli strategy of developing global markets.
"The data indicate a significant presence of the Israeli technological ecosystem in Europe," says KPMG Israel partner and head of technology Dina Pasca-Raz. "However, the nature of the activity and the type of companies differ from the familiar pattern of an early-stage startup that first addresses the US market: a clear majority (60%) of Israeli companies operating in Europe are mature companies (8-12 years old), with proven business models and the presence of relatively senior key figures in Europe. Despite the geopolitical challenges and sentiment that we have witnessed, particularly in the last two years, there is a natural synergy between Israeli strengths in AI, cybersecurity, robotics, and defense, and the structure of the leading European economies (Germany, France, and the United Kingdom) and the new European priorities, particularly in areas such as internal and external security. It is hoped that the end of the war will open the door to the integration of groundbreaking Israeli technologies and new and meaningful strategic partnerships." EIT Hub Israel managing Director Eden Dvir Zano: "Israeli technology has become a significant economic and innovative force within Europe. The data demonstrates the extent to which Israeli companies are taking root within the European market. They are not only creating tens of thousands of jobs, but also establishing R&D centers, building long-term partnerships with universities and industry, and directly contributing to the core areas that Europe has defined as priorities - AI, cybersecurity, climate technologies and digital infrastructure. Europe provides Israeli companies with what they need to grow: a unified market, a stable regulatory framework, extensive public financing and advanced industrial partners. What we see in the study is that Israeli companies do not see Europe as a replacement for the United States but as a complementary market that allows them to build broad operations and grow at scale." "The data clearly shows that Israeli companies are deepening their grip in Europe and establishing a professional, stable and long-term presence there. Europe has become a strategic territory for Israeli startups in recent years. It offers a rare combination of access to a large and major market, reliable regulation and advanced industrial partners, which allows companies to grow," said Elle Taitou Spruch, Investor at the Pan-European VC, Planven, "Companies that are interested in leading the market in their field are today obliged to think about Europe. We at Planven are closely following this expansion trend: Israeli companies in early growth stages are already expanding their commercial activities in Europe and their maturity to penetrate this market is higher than ever. We connect Israeli technology to innovation and data security leaders in European corporations in the fields of energy, finance, shipping, industry and hardware, and the desire to collaborate with Israeli innovation is only increasing. The connection between Israeli strengths in AI, cybersecurity, and healthcare and European priorities creates a real growth opportunity. The coming years will mark a further deepening of Israeli activity on the continent, a move that will serve both Europe and Israeli industry."
The study reveals a broad sectoral distribution that shows the maturity and diversity of the Israeli ecosystem in the EU. Healthcare and life sciences lead with 13% of all Israeli companies in Europe, followed by AI and machine learning (12.8%), software platforms and development tools (9.3%), data security (9%), communications and media (9%), financial technologies (7%), industrial and mobility technologies (7%), cloud computing and SaaS (5.2%), and IT services (4.3%). Smaller emerging sectors include clean energy and agri-food (2% each). The study also shows that 31% of Israeli companies in the European Union are represented at the level of VP or CEO, with this rate rising to 71% among larger companies. This managerial presence enables local strategic decision-making and close cooperation with European partners, contributing to a swift and effective 'closing the circle.'
Complementary Israeli strengths
The study points to great future potential for Israeli tech companies in Europe, especially due to the EU’s priorities for 2024-2029. The European focus on defense, sustainability, and digital innovation aligns perfectly with Israeli strengths in data security, climate technologies, and AI infrastructure.
The research identifies three key trends that cross all sectors: AI and automation penetrating information, finance and real estate technologies; sustainability and environmental awareness in advanced materials, clean energy and agriculture; and digital platforms and connectivity in digital health, fintech and consumer services.
In other words, Israeli strengths perfectly complement European strategic needs and goals.
Alongside these, the study also analyzes the source of Israeli companies’ attraction to Europe, and identifies several key pull factors: access to a market of over 500 million consumers, geographical proximity enabling efficient operations and convenient travel, significant R&D incentives including Horizon Europe funding and local tax breaks, and dynamic startup ecosystems in Berlin, Paris and Amsterdam, with access to venture capital and multinational partnerships.
The study was conducted based on 2022-2025 data and examined the development of the presence of Israeli companies across Europe, including a detailed analysis of departmental, sectoral and geographical distribution.
Published by Globes, Israel business news - en.globes.co.il - on December 24, 2025.
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