87 private hospital network featuring participation from two major health funds, Leumit and Meuhedet. For US investors, this type of structure is highly relevant, as it aligns access, contracting and distribution in a way that can significantly accelerate market adoption. Medical devices. Israel remains exceptionally strong in cardiovascular, interventional, monitoring, diagnostics and miniaturised hardware/software systems - precisely the categories where large strategic buyers are most active. Recent transactions involving V-Wave, SoniVie and Vectorious demonstrate that US acquirers increasingly view Israel as a premier strategic source for innovation and product development. Digital health and clinical-data infrastructure. The opportunity here is no longer simply “another app.ˮ Increasingly, real value lies in enterprise-grade tools that reduce friction across the healthcare system, such as clinical documentation automation, patient-flow optimisation, AI-assisted diagnostics, interoperability layers and data governance. Furthermore, Israel’s regulatory environment is shifting towards more structured health-data sharing and secondary-use frameworks. When implemented effectively, these frameworks support highly scalable data partnerships. The Datavant-DigitalOwl transaction exemplifies a US buyer acquiring Israeli capabilities that integrate directly into the US healthcare value chain, spanning claims, records and medical-evidence review. Biotech and bioconvergence. For US pharma and life sciences investors, there is renewed interest in bioconvergence - the intersection of biology, engineering, computation and data. Israel is not only producing cutting-edge companies in this space, but is also making significant national investments in the category. The opportunity set includes codevelopment, licensing and structured acquisitions where early technical risks can be balanced effectively through staged economics. What surprises US entrants? Even experienced global healthcare investors can encounter unexpected dynamics when first operating in Israel. The surprises rarely relate to the quality of innovation. More often, they relate to how the healthcare system is organised and how decisions are made. The “four HMOs” reality and concentrated purchasing power. US entrants quickly learn that Israel has a structurally concentrated payer environment. The four national health funds (Kupot Holim) act as the principal gatekeepers for adoption, pilots and scaling. With Clalit covering roughly half the population and Maccabi more than a quarter, negotiating effectively with these HMOs - both commercially and clinically - is not optional; it is absolutely central to market access. Faster pilots, but disciplined expectations. While Israel often approves pilots much faster than many US systems, the underlying expectations remain rigorous. Innovators must present clear clinical endpoints, measurable operational ROI and a realistic plan for integration across IT, workflow, cybersecurity and procurement. Public/private mix and governance expectations. Many Israeli healthcare assets operate in a hybrid reality, balancing public-service obligations and regulated environments with sophisticated private-sector activity. This dynamic directly affects procurement mechanics, contracting approaches, decision-making processes and overall timelines. Legal diligence points US buyers should not underestimate: Government funding and grants. Where Israel Innovation Authority (IIA) support is involved, buyers should conduct targeted diligence and plan early for any restrictions and required approvals relating to the transfer of IP and know-how outside of Israel. Data regulation and secondary use. Digital health businesses often succeed or fail based on the compliance, durability and scalability of their data models, particularly in light of strict Ministry of Health requirements, privacy laws and cybersecurity obligations. Founder-led governance. While high-quality teams often move quickly, US investors sometimes underestimate how early they need to align incentives, decision rights and exit mechanics, particularly in founder-led companies. Structuring entry into the Israeli market From a legal perspective, proper transaction structuring is critical. Sophisticated investors generally seek to balance downside protection with sufficient flexibility to scale rapidly if the investment thesis proves correct. ISRAEL — HEALTHCARE
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