Preparing For A Breakout Year For Israeli Companies In The US Capital Markets

With innovation in technology, artificial intelligence, defense, and life sciences driving investor demand, Israeli companies are poised to capitalize on a strengthening US IPO market in 2026.

Israeli companies have a long and successful track record in the US capital markets. Since the 1980s, hundreds of Israeli companies have listed on the Nasdaq or NYSE, and approximately 100 are currently listed—more than from any other foreign country apart from China and Canada. This leadership reflects Israel’s position as a global hub for innovation. US-listed Israeli companies span diverse industries, with fast-growing technology and life sciences companies particularly well-represented. Following a strong recovery of the initial public offering (IPO) markets, and significant M&A and foreign investment in the Israeli technology sector in 2025, the stage is set for continued momentum in 2026.

The US capital markets offer unparalleled opportunities for Israeli technology and life sciences companies to raise the capital necessary to achieve growth and global scale. A listing on a US exchange provides access to the world’s deepest pools of institutional and retail capital, attracting investment from both US and international investors. An NYSE or Nasdaq listing delivers liquidity, visibility, and credibility—often catalyzing strategic partnerships, M&A opportunities, and enhanced brand recognition. As the IPO market strengthens and investor appetite for innovation-driven companies intensifies, the window of opportunity for Israeli issuers is widening.

The US market continues to offer premium valuations for innovative technology and life sciences companies compared with other global markets. Israeli companies are well-positioned to benefit from this dynamic, potentially achieving stronger valuations that enable them to raise more capital on favorable terms. For Israeli founders, investors, and growth-stage companies, the path to the US public markets presents a strategic opportunity to accelerate growth, reward early stakeholders, and expand global reach.

Market Overview and Outlook

The US capital markets demonstrated continued recovery in 2025, with both IPO deal count and proceeds raised reaching their highest levels since 2021. A total of 202 IPOs raised approximately $44 billion in proceeds—a notable increase from 2024’s 150 IPOs raising $29 billion, and substantially exceeding the combined totals of 2022 and 2023. While this upward trajectory is encouraging, a deeper analysis reveals a market characterized by volatility and uneven activity. The year began strongly but stalled in April, regained momentum over the summer, and was then significantly cooled by a US government shutdown. The median deal size of approximately $15 million underscores a bifurcated market: While headline proceeds were driven by landmark billion-dollar offerings—including Medline, Venture Global, CoreWeave, SailPoint, and Klarna—nearly 65 percent of IPOs raised less than $100 million, reflecting substantial activity among microcaps. Notably, the number of IPOs raising more than $100 million remained below the 10-year average. Foreign issuers accounted for 115 (57 percent) of the year’s IPOs. Three Israeli companies completed IPOs in 2025: Odysight.ai, eToro, and Nasus Pharma.

The technology sector led the 2025 IPO market, producing 44 offerings that raised $9.6 billion. Key themes included software, e-commerce, cryptocurrency, and artificial intelligence. The health care sector contributed 34 offerings raising $10.7 billion—more than half attributable to Medline— though deal flow was constrained by a continued drought in biotech. The financial sector also showed relative strength, with 27 IPOs raising $9.2 billion, driven by digital asset managers, insurance, and crypto exchanges.

The special-purpose acquisition company (SPAC) market staged a meaningful comeback in 2025—with 144 blank check companies raising approximately $30 billion through IPOs—the third-largest year ever for SPAC activity after 2020 and 2021, and a substantial increase from 2024’s 57 SPACs raising $10 billion. SPAC IPO terms also became more favorable for sponsors. Industries targeted by SPACs include artificial intelligence, space, cryptocurrency, quantum computing, and nuclear power. While the number of completed de-SPAC transactions continued to decline—43 deals with $38 billion in deal value, down from 73 deals and $42 billion in 2024—this largely reflects the decreasing pool of 2020 and 2021 vintage SPACs. Despite seeing higher-profile names enter the market (including Webull in 2025), de-SPAC activity continued to be challenged by high redemption rates and uneven post-listing performance. Nevertheless, a number of SPACs remain active and in search of targets heading into 2026, and SPACs and de-SPACs will likely continue to provide pathways to the public markets for small- and mid-cap issuers.

“Following a strong recovery of the initial public offering (IPO) markets, and significant M&A and foreign investment in the Israeli technology sector in 2025, the stage is set for continued momentum in 2026.”

Looking ahead, the outlook for 2026 is constructive. The IPO environment is expected to benefit from moderating inflation and anticipated interest rate relief. A significant backlog of “IPO-ready” companies are poised to access the market. Proceeds and deal volumes are expected to increase year over year, with the market anticipated to skew toward technology, potentially driven by artificial intelligence and fintech companies. The life sciences and biotech sectors could experience a resurgence as M&A activity recycles capital and stimulates investment. Digital assets and defense-focused companies are also emerging as notable themes. Continued political uncertainty and market volatility in the United States remain risks that could disrupt plans, and actions taken by the current administration, geopolitical developments, tariffs, and global decoupling may introduce additional execution risk.

For Israeli companies, 2026 presents a particularly compelling opportunity. Israel’s strengths in technology, artificial intelligence, defense technology, and life sciences align closely with the sectors expected to drive US capital markets activity. Israeli companies in these high-growth industries are well-positioned to capitalize on strong investor appetite and favorable market conditions. De-SPAC transactions will continue to offer viable alternatives to traditional IPOs, particularly for small- and mid-cap issuers with innovative business models. As the US capital markets environment normalizes and investor interest in innovation-driven sectors intensifies, 2026 is positioned to be a takeoff year for Israeli companies seeking access to the world’s deepest and most liquid public markets.

Benefits of Being a Foreign Private Issuer

Israeli companies that access the US capital markets are subject to US federal securities laws. With the goal of making the US capital markets more attractive to foreign issuers, the Securities and Exchange Commission (SEC) makes available certain accommodations to alleviate some of the burdens of being a public company in the United States. Generally, to take advantage of these accommodations, an Israeli company must qualify as a foreign private issuer (FPI). FPIs benefit from more relaxed reporting requirements under SEC rules and regulations, including annual reporting on Form 20-F, exemption from Form 8-K current reporting requirements, exemption from US proxy rules, and flexibility to report financial statements under International Financial Reporting Standards (IFRS). In addition, the NYSE and Nasdaq provide more relaxed rules for FPIs, including certain rules related to stockholder approval for securities offerings, making access to capital potentially more streamlined.

The regulatory landscape for FPIs is evolving, however. In June 2025, the SEC issued a concept release seeking public comment on whether to revise the definition of “foreign private issuer.” The release reflects concerns that many FPIs now trade predominantly or exclusively in US markets and may not be subject to meaningful home-country oversight—the premise underlying the FPI accommodations. Approaches under consideration include updating US ownership thresholds, adding foreign trading volume requirements, requiring listing on a “major” foreign exchange, and incorporating an SEC assessment of foreign regulatory robustness. The SEC has not indicated timing for any proposed rulemaking. In addition, in December 2025, the US Congress enacted a law to end the long-standing FPI exemption from Section 16(a) beneficial ownership reporting obligations for directors and officers of public companies.

Importantly, SEC Chairman Paul Atkins has indicated that the SEC is considering exempting Israeli companies from planned tightening of the FPI rules, which would allow the vast majority of Israeli issuers to continue operating under established regulatory accommodations. This potential exemption reflects Israel’s strong existing regulatory framework for capital markets and the long-standing track record of Israeli companies in the US public markets.

Corporate Governance Considerations

Generally, FPIs are permitted to opt out of most NYSE and Nasdaq corporate governance requirements and may instead follow home-country practice. These companies must publicly disclose the ways in which their corporate governance practices differ from those followed by US domestic issuers. Additionally, under the Israeli Companies Law, Israeli “public companies,” which include those with shares listed on the NYSE or US domestic companies are required to have a board composed of a majority of independent directors within 12 months of listing. Most issuers have a majority independent board at time of listing. FPIs may opt out of this requirement and apply home-country practice. As noted above, Israeli companies are required to have at least two external directors unless they are eligible and so elect to opt out of this requirement.

Audit Committees

FPIs are required, just as US domestic companies are, to have an independent audit committee that meets the requirements of Exchange Act Rule 10A-3. Audit committees under NYSE and Nasdaq rules must:

• Be composed of only independent directors.
• Have at least one audit committee financial expert.

Both US domestic companies and Israeli FPIs are required to have audit committees composed of at least three directors. If an Israeli company has not opted out of the audit committee composition requirements under the Companies Law, its board would also be required to include all external directors and be chaired by an external director. The board chair as well as directors or affiliates of any controlling shareholder(s) should not serve on the audit committee. Under the Companies Law, the board of an Israeli public company must also appoint an internal auditor recommended by the audit committee.

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Originally published by The US-Israel Legal Review 2025/26.

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