Viola Ventures has announced the launch of two new investment funds totalling approximately US$250 million, signalling its continued commitment to Israel’s technology sector across both early and growth-stage companies.
The move comes amid structural changes in the Israeli venture capital market and a slowdown in new startup formation, highlighting the firm’s long-term strategy to support innovation despite challenging market conditions.
The first of the new vehicles, Viola Conviction Fund I, is a dedicated secondary fund sized at around US$100 million. It is designed to provide liquidity and ongoing capital to existing portfolio companies, allowing mature assets to continue scaling even as late-stage capital becomes more selective.
By targeting established assets within its portfolio, the fund aims to stabilise growth for companies that have demonstrated strong performance potential but may face limited options in the current market environment.
Understanding the Viola Ventures VII
Alongside the secondary fund, Viola Ventures VII, the firm’s seventh flagship fund, has reached its first close. Scheduled for formal launch in early 2026, the fund will focus on seed, Series A, and incubation-stage startups, supporting around 20 new investments in its initial deployment.
The fund will target high-growth sectors including vertical AI, enterprise AI, AI infrastructure, fintech, cybersecurity, quantum technologies, and defence tech, areas where Israel has established a strong global reputation.
“Viola’s Conviction Fund I invests through secondary transactions in our outlier portfolio companies. Viola Ventures Early-Stage Fund will focus on supporting the next generation of early-stage gamechangers across seed, Series A, and incubation,” the company said in a LinkedIn post.
The company said the funds will be led by partners Omry Ben David, Zvika Orron, and Viola co-founder Shlomo Dovrat, supported by an experienced investment team including Alex Shmulovich, Tal Abuloff, Alon Cinamon, and Assaf Shriber.
Capitalising on Israel’s Deep-Tech Momentum
Viola’s strategy aligns with broader trends in the Israeli tech ecosystem. Currently, the country hosts 342 generative AI startups that have collectively raised over US$20 billion.
Between 2019 and 2025, Israeli deep-tech companies have secured more than US$28 billion in funding, reflecting sustained global interest despite domestic market slowdowns.
The fundraising effort also comes amid a cooling domestic venture market. Annual new company formation in Israel has fallen from over 1,000 startups a decade ago to roughly 500 in 2024.
Average VC fund sizes have declined from US$90 million (2017–2022) to US$60–65 million (2023–2025), while high-tech output has plateaued at 17 percent of GDP and R&D employment has declined by 6.5 percent.
Despite these headwinds, Viola Ventures’ long-duration capital and dual focus on early-stage startups and portfolio support create strategic opportunities for corporate venture arms, cloud providers, and cybersecurity firms to pursue co-investments and commercial partnerships ahead of the fund’s full deployment in 2026.
Talking Points
It is notable that Viola Ventures has launched two new funds totalling US$250 million, demonstrating a long-term commitment to Israel’s technology ecosystem at both early and growth stages.
This dual-fund approach positions Viola as a flexible investor: the Conviction Fund I supports mature portfolio companies with liquidity and ongoing backing, while Viola Ventures VII focuses on seed, Series A, and incubation-stage startups.
At Techparley, we see how this strategy addresses critical gaps in the Israeli venture market, particularly at a time when new startup formation is slowing and domestic venture funding is tightening.
The focus on high-growth sectors such as vertical AI, enterprise AI, fintech, cybersecurity, quantum technologies, and defence tech aligns with Israel’s established global strengths and emerging deep-tech trends.
As Viola Ventures deploys these funds, there is an opportunity for corporate venture arms, cloud providers, and cybersecurity firms to engage in co-investments and commercial partnerships, enhancing the ecosystem while scaling innovation.
With the right strategic support and long-duration capital, Viola Ventures has the potential to accelerate the growth of the next generation of Israeli tech companies, bridging gaps between early innovation and mature, scalable enterprises.
——————-
Bookmark Techparley.com for the most insightful technology news from the African continent.
Follow us on Twitter @Techparleynews, on Facebook at Techparley Africa, on LinkedIn at Techparley Africa, or on Instagram at Techparleynews.
