On October 13, Rocket Software announced its acquisition of Geniez AI, a roughly one-year-old startup with six employees, in a deal estimated at up to $100 million. Two weeks earlier, Valley National Bancorp agreed to acquire established fintech company Bluevine for approximately $340 million.
These are two examples from a broader wave of deals, ranging from multibillion-dollar transactions, such as Proofpoint’s $6.3 billion agreement to acquire Varonis, to nimble AI teams commanding impressive price tags before their products are fully mature.
Geneiz founders
(Photo: David Garb)
This prompts a familiar question: Is the classic Israeli exit market officially back?
The short answer is that dealmaking is clearly resurgent. The longer answer is that the market has returned in a very different form.
An emerging pattern in the current M&A wave is a sharp bifurcation: strategic buyers are paying premiums for scarce, early-stage technology and talent, while mature companies are being assessed against tougher financial benchmarks and more pragmatic acquirer priorities.
Two realities: early agility vs. legacy valuations
Some enterprise buyers are willing to pay substantial premiums for early-stage technological advantage. In the race for agentic AI and amid rapid architectural shifts, large software companies may decide that acquiring proven capabilities is faster than building them in-house. They are buying ready-made breakthroughs, proprietary IP and elite engineering teams that can be integrated quickly into existing product roadmaps.
Conversely, some growth-stage companies that scaled during the zero-interest-rate era at lofty valuations now face a sobering reality check. When they exit, transaction values may reflect substantial haircuts to their peak private-market valuations. Many acquirers are placing less weight on projected growth at scale and more on immediate strategic value, durable revenue and a credible path to profitability.
A split in acquirer profiles
This bifurcation is also visible in the profiles of acquirers. Early-stage AI startups are often targets for global software platforms and hyperscalers operating under intense pressure to move quickly. In such deals, talent density, proprietary IP and time to market may outweigh traditional metrics such as annual recurring revenue or headcount. Mature technology companies, by contrast, may attract traditional enterprises and private equity-backed consolidators seeking distribution, customer access and proven cash flows. Those buyers are more likely to price acquisitions using recalibrated financial multiples rather than potential alone.
Across both tracks, specialized cybersecurity, data-governance and AI-infrastructure companies have become strategic assets for global technology platforms. At the same time, non-technology incumbents are acquiring digital platforms to gain greater control over their technology capabilities and customer relationships.
The new R&D paradigm in the era of AI
This wave raises the perennial anxiety: Are we trading away future tech giants to become branch offices or R&D mini-sites for multinationals?
In the AI era, the picture is more dynamic. Unlike some past acquisitions that absorbed large workforces, many current deals integrate small, specialized engineering teams into global platforms as focused research hubs. When acquirers retain and expand those teams, such deals can embed critical AI expertise in Israel, expose local engineers to global operating experience and reinforce the recycling cycle through which experienced founders launch new ventures.
Yaniv AronowichPhoto: Tami Bar ShaiA new rulebook for entrepreneurs
The exit market is back, but the rules have changed. For founders building indispensable frontier technology, the opportunities may be greater than ever. In this market, relevance to a buyer’s most urgent priorities is the ultimate currency.
For Israeli founders, however, this environment demands greater strategic discipline. The era of growth at all costs has given way to capital efficiency, defensible proprietary technology and a focus on high-value enterprise bottlenecks from day one.
- Yaniv Aronowich is a partner in the Hi-Tech and Venture Capital practice at ERM Law Firm.