Israeli technology companies have significantly expanded their operations across Europe over the past three years, according to a new study by EIT Hub Israel, Planven, and KPMG. The report finds that Israeli firms now employ more than 30,000 workers across the continent, with employment growing at an average annual rate of 4.8%.
The data shows that most Israeli companies operating in Europe have chosen to establish activities within EU member states. Germany, Spain, and France serve as the primary innovation hubs, while Central and Eastern European countries-particularly Poland, Romania, and the Czech Republic-have become important locations for engineering centers and shared services. In Lithuania, Bulgaria, and Romania, Israeli companies have created large service centers employing hundreds of workers.
“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 US market.”
According to her, a large majority (around 60%) of Israeli companies operating in Europe are mature businesses that are typically 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,” Pasca-Raz added.
R&D as a central component
Research and development teams account for about 40% of Israeli employees in Europe, underscoring the sector’s emphasis on innovation. Sales and customer service roles form the second-largest segment, reflecting efforts to expand global market reach.
“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,” said Eden Dvir-Zano, Managing Director of EIT Hub Israel. “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.
Elle Taitou Spruch, Investor at Planven, said Europe has become a strategic destination for Israeli early-growth companies, offering access to a large market, stable regulation, and advanced industrial partners. She added that alignment between Israeli capabilities and European needs is creating new opportunities.
Sector breakdown
According to the study, Europe provides Israeli companies with what they need to grow: a unified market, a stable regulatory framework, extensive public funding, and advanced industrial partners. Israeli companies do not view Europe as a substitute for the United States-a central market for Israel- but as a complementary market where they can build deep operations and scale.
The study shows a broad sectoral distribution among Israeli companies in Europe. Health and life sciences lead with 13%, 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%). Emerging sectors such as clean energy and agri-food each account for about 2%.
Thirty-one percent of Israeli companies in the EU have senior executives-VPs or CEOs-based locally. Among larger companies, this figure rises to 71%, enabling faster decision-making and closer cooperation with European partners.
“The data shows that Israeli startups are deepening their long-term presence in Europe״, said Elle Taitou Spruch, Investor 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.”
Drivers of expansion
The report identifies several factors attracting Israeli companies to Europe, including access to a market of more than 500 million consumers, geographic proximity enabling efficient operations and convenient travel, significant R&D incentives, local tax benefits and dynamic startup ecosystems in Berlin, Paris, and Amsterdam that have access to venture capital and multinational partnerships.
The study points to significant potential for further expansion for Israeli companies, particularly as Europe is prioritizing defense, sustainability, and digital innovation between 2024 and 2029. It identifies three major cross-sector trends: the spread of AI and automation, sustainability and environmental technologies, and the growth of digital platforms in health, finance, and consumer services. Israel’s strengths in cybersecurity, climate tech and AI infrastructure “aligns perfectly” and complement European needs and strategic goals, the report said.
The report is based on data from 2022–2025 and includes detailed analysis of sectoral, departmental, and geographic distribution of Israeli companies across Europe.