Many aspects need to be taken into consideration before labeling a country as powerful and resourceful. Standard of living, GDP, employment rate, are often discussed when assessing a country’s economic capability. However, a new force can seriously influence how nations rate when put under the magnifying glass: start-up friendliness.While most people think of Silicon Valley, Scandinavia, or Asia when talking about start-ups, there’s a continuously developing petri dish of start-up culture in the Middle East.
The region has always been rich in terms of raw materials and resources. Despite the constant tensions in the area, a tiny country has managed to grow strong and become serious competition for the nations traditionally thought of as start-up friendly. Israel has managed to build an incredibly advanced ecosystem of start-ups, especially in the tech industry. Some might even say one of the world’s best ecosystems. In a rather short period, Israel won the name of Start-Up Nation, being the host to some of the world’s most innovative start-ups.
It wasn’t too long until Israel caught the attention of international market experts, entrepreneurs, and investors, such as David Kezerashvili. They quickly oriented towards Israel to identify those companies that have the potential of leaving a worldwide mark. So what is behind Israel’s Start-up Nation growth?
Israel Background and Raise to Tech Power
As a small country with only 8.6 million people, Israel has always been the aim of many political and social hardships. Out of all these struggles, Israel has become, not only a nation simply surviving but thriving over the past few years. Quickly Israel has grown to be an economic powerhouse, not only in the Middle East but globally as well. The most important investment by Israel has been to provide their start-up culture with plenty of resources. At least 6,000 Start-ups have their origins in Israel, the highest number worldwide.
Some studies show in the last decade, at least 2,000 start-ups were founded in Israel, with many of those in the high tech industry. Many of these start-ups have grown to become some of the fastest-growing and top in their field’s companies.Throughout the last decade, many start-ups have become epicenters of research and development for large multinational corporations as well.
Perhaps one of the most famous start-ups from Israel that has grown to become an essential app is Waze. Global popularity aside, few know that Waze was an Israeli Start-up company that only later was acquired for over $1 billion by Google. At the time of the sale, the company’s employees received on average $1.2 million. It was one of the largest exit payouts for high-tech employees in Israel.
Israel’s philosophy lies in the ability to teach and support its citizens, even beyond tech industries. Higher education is highly accessible in Israel with a 60% enrolment rate. Entrepreneurship is also an important part of Israeli culture. These two factors together create an interesting culture of opportunity for new Israeli businesses.
Many Israeli tech founders also have the advantage of serving in important cyber units of the Israeli military. These young people learn computer science in a unique environment with differing consequences from their peers. The overall cultural push guides many young people towards tech careers. It’s little surprise that many also embrace entrepreneurship and build companies to try and change the world.
Best Start-Up Nations to Invest in
David Kezerashvili, known for investing in real estate and media companies, hasn’t hidden his preference for start-ups, and Israeli based ones especially. A considerable part of his investment has been towards companies that deliver amazing tech services and media experiences.
Some of the best 30 tech companies in Israel are currently valued at over $1 billion, but due to the global Covid-19 crisis, there has been a cooling of mergers and acquisitions. This was especially felt in 2020. Despite the slowdown of outside acquisitions, Israeli start-ups adapted well to the effects of Covi-19 and appear to be poised for a big return of outside markets.
Companies like InfinityVC, a digital solutions company, are among the strongest ones that also caught David Kezerashvili’s eyes.
Fintech is a smaller part of Israel’s start-up culture but it’s global growth is felt as well. A new wave of Israeli Fintech companies appears to be on the horizon. Israel has been prolific in it’s creation of Unicorns, or companies valued at over $1 billion before IPO. This trend has continued with the Fintech industry as well as other high tech industries.
Among the most popular Israeli-based companies that may ring a bell to international investors included: eToro, Lemonade, and even Payoneer. Worldwide investors are eyeing Israel’ Start-up ecosystem to find the new rising stars. For example, the start-up Rapyd made headlines after raising around $300 million in financing.
Another important industry for Israel’s tech sector is cybersecurity. Israeli cybersecurity start-ups have raised around $1.19 billion in foreign venture capital investments. No less than 450 companies already operate in this industry. Cybersecurity has existed in the Start-up Nation since the 1980s when Israeli firms started to build the first anti-virus software applications.
Finally, we must mention the streams that some start-ups managed to put on the global map.
Venture Capital firms from around the world are interested in what Israel’s startup ecosystem will produce as the next ‘big thing.’ David Kezerashvili has looked to the emerging insurance-tech sector. Lemonade and Hippo are popular and somewhat established options in this sector but more are looking for funding every day.
Despite being a small country, Israel’s growth as a Start-Up Nation is a worldwide economic revelation. With the help of these companies, the world can embrace evolution, even in changing times like the ones we face now.
Worldwide investors are eyeing the Israel Startup Nation ecosystem to grip on the new rising stars. And where is Israel a true leader in the cybersecurity industry?
Israeli cybersecurity startups receive around $1.19 billion of global VC investments, and not less than 450 companies already operate under this umbrella. This industry has existed in the Start-up Nation since the ‘80s when companies first started to build antivirus software.
Finally, we must mention the streams that some startups managed to put on the global map. As this is also the field that David Kezerashvili is interested in, Israel is home to about 100 companies in insurtech that have businesses’ back. Lemonade and Hippo are among the most popular ones.
Despite being a small country, Israel’s growth of StartUp Nation is a worldwide economic revelation. With the help of these companies, the world can embrace evolution, even in changing times like the ones we face now.