Five reasons Israeli tech growth is just beginning

Published date20 September 2022
Publication titleJerusalem Post, The: Web Edition Articles (Israel)
But starting around 2014, I heard more and more Israeli venture capitalists start to wonder, "Why do we keep selling good technologies instead of building great companies? Why don't we let our winners run?"

Over the years, I had seen the Israeli VC community invest in hundreds of successful Israeli start-ups, enjoying great exits and great returns. However, most start-ups didn't have access to the growth capital or the experienced leadership teams to make the leap from a local tech start-up to a $1+ billion global enterprise.

From 2013 through 2017, three events played a key part in the evolution of the local perspective. The sale of Waze to Google in 2013 for $1.1b. was a high-profile transaction. Waze had already built a significant brand, with massive adoption and accelerating growth when it was sold.

While it was an exciting transaction for the local market and drew significant global attention, it left many in the local community wondering if it was sold too early.

Several months later, Mobileye went public as the largest US IPO of an Israeli company ever at that time. Less than four years later, Intel acquired the publicly traded Mobileye for $15.3b., marking the largest-ever sale of an Israeli technology company.

But times have changed

In recent years, Israel has let its winners run. Five years ago, 96% of Israeli start-up exits happened via M&A. Last year, just 60% exited through M&A, signaling that Israeli entrepreneurs are increasingly building companies that can create long-term value in public markets. The biggest investors in the world have taken notice.

On September 20-22, a select group of the world's top technology-focused investors across public and private markets will converge in Tel Aviv to connect with Israel's fastest-growing and most exciting companies at Jefferies Tech Trek.

It will be the largest institutional technology investor conference ever hosted in Israel.

Our attendees – some who are visiting Israel for the first time and others who have not been here in several years – will engage with a tech ecosystem that has been utterly transformed. Ironically, Israel became relevant for growth investors just at the time when COVID restrictions made it impossible for them to visit.

In 2021 alone, both the size and volume of investments in the Israeli tech ecosystem grew exponentially. Some $25.6b. was invested in Israeli tech start-ups in 2021, five times the amount that was invested in 2016.

More than half this volume – $14.2b. – came...

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