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Israel is perhaps best known for the holy city of Jerusalem. Legions of tourists, history buffs, and worshippers flock to visit and experience the nation’s rich culture and countless historic sites every year.
Yet, its tech prowess hardly receives the recognition it deserves. Did you know that Israel was among the pioneers of the instant messaging revolution? Mirabilis, an Israeli startup, helped bring instant messaging to the masses after its ICQ service, invented in 1996, garnered 100 million users.
The bustling metropolitan city of Tel Aviv also placed seventh in a survey of the world’s most attractive ecosystems for startups and innovation, after fledgling companies in the city reached a combined value of US$120 billion. In fact, with over 6,000 active startups and a high-tech economy, Israel has earned the nickname “The Startup Nation.”
While it remains somewhat surprising that the country’s blossoming startup ecosystem continues to fly under the radar among the general public, it has definitely caught the attention of the investor community. In today’s premium story, we’ll shine the spotlight on the investors who have poured money into Israel-based startups in the last two years.
Today we look at:
- The most active investors in Israel
- How Capital A has benefitted from the returning demand for travel
- Other newsy highlights such as Shein’s massive valuation cut and Alibaba’s dual listing plans
Also, if you’re an entrepreneur looking for funding, fill out this form to get your company featured on our list of fundraising startups.
Premium summary
Funding Israel
Image credit: Timmy Loen
Funding for startups across the world is drying up quickly as investors brace for the impact from an impending economic slowdown. However, Israel’s budding tech firms continue to churn out record numbers. Startups from Tel Aviv, which is the heart of Israel’s startup ecosystem, raised a record-breaking US$20 billion and gained 30 new unicorns in 2021.
Additionally, the growing venture capital and private equity interest in Israel isn’t a surprise, as the average time for a startup from Tel Aviv to exit is seven years, which is considerably quicker than the global average of 9.4 years.
- A clear frontrunner: Among companies that back Israeli startups, no firm can match Insight Partners’s tally of 29 deals over the last two years. The US-based venture capital firm is 12 deals ahead of OurCrowd, which placed second, and has made some considerable investments in internet-enabled businesses such as Deci AI, Incredibuild, AiVF, Jit, and Perimeter 81.
- Homegrown VCs go domestic: Startups in Israel have received strong backing not only from foreign investors but also VC firms on their home turf. Ten of the nation’s 15 most active investors over the last two years come from Israel and have participated in over 100 funding rounds with local firms.
- An outlier: All of the top 20 most active investors in Israel are either domestic firms or based in the US. The sole exception is Entrée Capital, a UK-based VC firm that has invested in 12 Israeli firms over the last two years, including the likes of Bookaway, Sensi.AI, Imagindairy, and Hibob.
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