A comprehensive study conducted by EIT Hub Israel - the Israeli innovation hub of the European Institute of Innovation & Technology (EIT), an EU organization - together with the VC fund Planven and the consulting firm KPMG, reveals that over the past three years Israeli technology companies have significantly expanded their activities across Europe. These companies now employ more than 30,000 workers throughout the continent, with an average annual growth rate of 4.8% in employment over the past three years.
According to the findings, most Israeli companies operating in Europe chose to establish activities within EU member states, with Germany, Spain and France serving as the main innovation hubs. At the same time, the study highlights the growing importance of Central and Eastern Europe as key centers of activity, with Poland, Romania and the Czech Republic functioning as cost-effective operational bases for engineering centers and shared services. It also notes countries such as Lithuania, Bulgaria and Romania, where Israeli companies are establishing large service centers employing hundreds of workers, thereby creating significant employment clusters.
Companies are mature, innovative and diverse
The study succeeds in painting a clear—and at times surprising—picture of the profile of Israeli companies operating in Europe. It finds that R&D departments account for approximately 40% of the workforce employed by Israeli companies in Europe, underscoring Israeli high-tech’s strong focus on innovation. Sales and customer service departments constitute the second-largest component, reflecting the Israeli strategy of developing global markets.
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Elle Taitou Spruch, investor at the Pan-European VC, Planven; Dina Pasca-Raz, partner and head of Technology at KPMG Israel; Eden Dvir-Zano, managing director of EIT Hub Israel
(Photos: Courtesy)
“The data shows that Israeli startups are deepening their long-term presence in Europe," said Elle Taitou Spruch, senior investment associate at the Pan-European VC, Planven. “The continent has become a strategic destination, offering access to a major market, reliable regulation, and advanced industrial partners that enable responsible growth. We see this trend firsthand: early-growth companies are expanding in Europe with greater readiness than ever. The alignment between Israel’s strengths in AI, cybersecurity and health, and Europe’s priorities is creating meaningful opportunities, and we expect Israeli activity on the continent to continue to accelerate in the years ahead.”
“The data highlights the significant presence of the Israeli technology ecosystem in Europe,” says Dina Pasca-Raz, partner and head of Technology at KPMG Israel. “However, the nature of this activity and the profile of these companies differ from the familiar model of a young startup initially targeting the U.S. market. A clear majority (around 60%) of Israeli companies operating in Europe are mature businesses (8-12 years old) with proven models and senior executives based in the region. Despite geopolitical challenges and the sentiment we’ve seen over the past two years, there is a natural synergy between Israel’s strengths in AI, cybersecurity, robotics, and defense and the structure of leading European economies such as Germany, France and the UK, as well as the EU’s new priorities, particularly in internal and external security. We can hope that the end of the war will pave the way for the adoption of groundbreaking Israeli technologies and foster new, meaningful strategic collaborations.”
Eden Dvir-Zano, managing director of EIT Hub Israel, adds: “Israeli technology has become a significant economic and innovative force within Europe. The data demonstrate how deeply Israeli companies are embedding themselves in 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 contributing directly to core areas Europe has defined as priorities—artificial intelligence, cybersecurity, climate technologies and digital infrastructure.
Israeli strengths complement European needs and strategic goals exceptionally well
Europe provides Israeli companies with what they need to grow: a unified market, a stable regulatory framework, extensive public funding, and advanced industrial partners. What we see in the study is that Israeli companies do not view Europe as a substitute for the United States, but rather as a complementary market that enables them to build deep operations and scale.”
The study reveals a broad sectoral distribution that demonstrates the maturity and diversity of the Israeli ecosystem in the European Union. Health and life sciences lead with 13% of all Israeli companies in Europe, followed by artificial intelligence and machine learning (12.8%), software platforms and development tools (9.3%), cybersecurity (9%), communications and media (9%), financial technologies (7%), industrial technologies and mobility (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 further shows that 31% of Israeli companies in the EU are represented at the level of VP or CEO, a figure that rises to 71% among large companies. This managerial presence enables local strategic decision-making and close collaboration with European partners, contributing to rapid and effective “closing of the loop.”
Complementary Israeli strengths
The study points to significant future potential for Israeli high-tech companies in Europe, particularly in light of the EU’s priorities for 2024–2029. Europe’s focus on defense, sustainability, and digital innovation aligns perfectly with Israeli strengths in cybersecurity, climate technologies and AI infrastructure.
Three cross-sector trends are identified: the penetration of AI and automation into data, finance, and prop-tech; 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 complement European needs and strategic goals exceptionally well.
In addition, the study analyzes the drivers attracting Israeli companies to Europe and identifies several key factors: access to a market of more than 500 million consumers; geographic proximity enabling efficient operations and convenient travel; significant R&D incentives, including Horizon Europe funding and local tax benefits; and dynamic startup ecosystems in Berlin, Paris, and Amsterdam, with access to venture capital and multinational partnerships.
The study is based on data from 2022–2025 and examined the development of Israeli companies’ presence across Europe, including detailed analysis of departmental, sectoral, and geographic distribution.
As a global outreach location of the European Institute of Innovation and Technology (EIT), the EIT Hub Israel, which conducted the story, creates synergies between the EIT community and the Israeli innovation ecosystem, supporting the growth of innovative startups and strengthening Europe’s innovation competitiveness through European-Israeli collaboration.
Led by the strategic outlook that a global approach is required to solve global challenges, EIT Hub Israel is part of the EIT Global Outreach initiative, alongside hubs in the UK, Silicon Valley, and an additional platform dedicated to expanding EIT's reach to new locations worldwide.
KPMG, which assisted with the study, is one of the world’s four leading firms in audit, tax and advisory services, operating in more than 140 countries and employing approximately 250,000 partners and professionals. In Israel, KPMG includes around 1,700 experts, including about 100 partners, operating across six offices nationwide. The Israeli firm includes KPMG Technology Consulting, which develops innovative solutions in digital transformation, AI, cybersecurity, data, machine learning, and cloud. The team comprises leading experts with extensive experience across finance, technology, healthcare, government, and industry.
The firm is organized in a unique structure of sector-focused teams composed of multidisciplinary professionals working in close, targeted collaboration. Each team specializes in one of nine core sectors of the economy—technology, finance, real estate, insurance, growth companies, government, industry and retail, communications and energy, and nonprofits and public institutions—providing tailored 360° services based on a deep understanding of client needs.
Planven is a pan-European VC firm investing in early-growth companies in Europe and Israel at key inflection points, with a focus on cyber, AI, digital health and vertical SaaS, typically at Series A / B / C stages. Planven helps Israeli companies expand into Europe and supports European scale-ups entering global markets.