Less than two years after it was founded, Israeli artificial intelligence startup Wonderful AI has reached a level of fundraising and revenue growth rarely seen in the country’s technology sector outside cybersecurity.
The company raised $550 million this week at a valuation of $5 billion, more than double the $2 billion valuation attached to its previous funding round just six months ago. Wonderful, founded in early 2025 by Bar Winkler and Roey Lalazar, has now raised more than $800 million in total.
Founders Bar Winkler and Royel Lalazar
(Photo: Daniel Jackont)
But the more striking number may be its revenue growth.
Wonderful went from essentially no revenue a year ago to a current revenue pace of about $70 million, and is expected to reach $100 million by the end of the year.
The trajectory invites comparisons with Wiz, the Israeli cybersecurity company that became one of the fastest-growing software businesses ever produced in Israel. Wiz reached a $6 billion valuation about two years after its founding and annual recurring revenue of $100 million after roughly 18 months.
Wonderful’s rise, however, is based on a very different business model.
The company initially identified a gap in the AI market: while artificial intelligence products were developing rapidly in English-speaking countries, adoption was moving more slowly in markets where other languages dominated.
Wonderful built voice-based AI solutions for customer service centers in non-English languages and expanded in an unusual direction, focusing initially on markets outside the United States.
Israeli customers may already have interacted with Wonderful’s technology without knowing it when calling organizations including Maccabi Healthcare Services, Bank Leumi, Bezeq and the Israel Electric Corporation.
Yet in announcing its latest funding round, Wonderful no longer presented itself primarily as a voice customer-service company. Instead, it described its product as an “AI operating system,” without highlighting the voice centers that had been central to its pitch only a year earlier.
People familiar with the company describe a rapid, almost chaotic evolution reflecting the extraordinary speed at which the wider AI industry itself is changing.
“Wonderful entered some of the strongest and largest organizations with interesting technology that was impressive for its time,” said Uri Eliaviev, an artificial intelligence expert and adviser to companies in the field.
“Later, they were smart enough to build a strong marketing and sales organization based on senior executives from well-known technology companies, and that allowed them to expand rapidly,” he said.
“What was truly brilliant was that Wonderful’s people quickly understood that once they got a foot in the door of an organization, it needed more and more assistance and guidance in adopting AI. That is what the company provides today.”
Hundreds of employees inside customer organizations
That shift is also central to understanding why Wonderful needs so much capital.
One of the products it effectively sells is skilled labor.
Of Wonderful’s 650 employees, around 400 do not work from the company’s own offices. Instead, they are placed inside customer organizations, where they work on projects implementing AI agents.
Those employees act as a bridge between the artificial intelligence technology and the organization adopting it. Because they are already embedded with the customer, they learn where AI agents can be introduced most effectively and can then offer Wonderful’s technology and implementation services in additional areas.
In practice, they function both as technical implementers and, to some extent, as salespeople.
The approach places Wonderful in a growing category known as “service-led software,” rather than the traditional software-as-a-service, or SaaS, model that dominated the technology industry for much of the past decade.
Alongside the employees it supplies to customers, Wonderful also charges for access to its AI operating system.
The strategy resembles the model pioneered by Palantir, the U.S. data and AI company that has built a large business by placing highly skilled personnel close to customers and helping them integrate complex technology into their operations.
A similar model is also being used by Israeli startup Unframe.
Wonderful may not welcome another comparison, but in some respects its present structure also resembles the early years of Amdocs, when professional employees, often engineers, were sent into large customer organizations that struggled to adopt new internet-era technologies and services.
Rapid growth, lower margins
Wonderful’s expansion has produced enormous revenue growth, but it has also created numbers that look unusual for a software company.
The startup already employs 650 people, about half of them in Israel, and plans to triple its workforce within a year.
It also announced about a month ago that it was establishing a center in Mumbai, where it plans to recruit roughly 1,000 additional employees over the coming year.
That heavy reliance on skilled labor affects profitability.
According to the Wall Street Journal, Wonderful’s gross margin is about 52% of revenue.
For a conventional software company, that would be low. Traditional software businesses often operate with gross margins of roughly 70% to 90%, because once the software has been built, serving additional customers can require relatively little incremental labor.
Wonderful’s model is different. Each expansion into a customer organization can require additional AI specialists, making growth more expensive.
That also helps explain the company’s rapid succession of fundraising rounds.
On one hand, investors are increasingly valuing Wonderful as an AI infrastructure company rather than simply another SaaS startup.
On the other, its operating model carries substantial costs and may require continued access to large amounts of capital.
Some industry observers also argue that Wonderful’s current pace of expansion may partly reflect aggressive pricing designed to penetrate large organizations and compete with established companies such as Salesforce and Accenture.
The comparison is sometimes made with Uber in its early years: customers enjoyed relatively low prices while venture capital absorbed much of the cost of rapid expansion, before the company matured into a public business.
For Wonderful, the central question is therefore no longer whether it can grow quickly. The jump from zero revenue to a $70 million pace in roughly a year has already demonstrated that.
The harder question is whether a company built around both software and a large, expensive workforce can eventually produce the margins investors normally expect from a business valued like an AI infrastructure platform.