Don’t let its size fool you! Israel, a country with only 8 million people, is a technology powerhouse. On the heels of a record-breaking year in 2017, highlighted by a whopping $23 billion in exits, the stage is set for this small country to continue its run, solidifying its position as a powerhouse in the global technology landscape.
The most successful companies are playing to the strengths and resources of the local ecosystem and not afraid to get scrappy in their quest to ‘light a fire’ under their Silicon Valley and NYC counterparts. From cybersecurity, to artificial intelligence and fintech, companies like APERIO Systems, Datorama, Sisense, and Fiverr are pushing the envelope by introducing and advancing next-generation technology, thus strengthening the Israeli economy and grabbing the attention of the global venture capital community.
Israel’s clear dominance in artificial intelligence is undeniable as the region leads the way (by leaps and bounds) in natural-language processing, computer vision, machine learning and deep learning. As it stands, local startups have been able to effectively scale the technology across multiple industries, resulting in AI percolating beyond generalized tech and becoming a core asset in both the educational and military fields as well. The prowess of artificial intelligence is no secret, and Israeli startups focused on the space are aggressively and competitively touting their abilities to predict where the next car accident is most likely to happen, flawlessly analyze, and process biopsies to diagnose the most allusive diseases (Nucleai).
According to a recent article, of the $5.24 billion raised by startups in 2017, $1.1 billion or 20 percent of that total, was invested into AI companies.
Furthermore, the in vitro ecosystem of Israeli-focused U.S. VCs and launch pads like Scopus Ventures, ICONYC, SilverTech Ventures, and UpWest Labs are also helping to fill the business and funding gaps, and build solid companies with the addition of American resources. Ian Collins, of GTM Global was quoted in a recent Forbes article as saying, “Businesses have been able to develop strong connections, via both the army and attending university, while tech companies due to the country’s small size, have also been forced to look beyond its borders and expand internationally quickly. This makes them appealing to investors and international business hubs.”
As previously mentioned, Israel experienced one of its most active years in terms of exit transactions highlighted by IPOs, mergers and buyouts in 2017. The $23 billion in exits actually represents a 19 percent increase from the previous year, as reported in No Camels. But, a new trend is developing – focused on the shift from an emphasis on ‘quick returns’ to a more concerted effort on the support and maturation of Israel’s most successful startups. As the entire tech ecosystem continues to blossom, the region is promoting the incubation of bigger companies, with bigger global footprints and more advanced enterprise capabilities. Over the last three years, the Israel Growth Forum has made strides to change the perspective of the local government and tech community to help companies effectively grow, therefore boosting their ultimate value. The 20 midsize startups that make up the forum have remained committed to lobbying the government on issues that are most impactful and pressing to the greater tech community.
On the transactional side of the tech industry, Israeli startups are also particularly strong on the marketing and sales front. From brand building to demand generation, BDRs, SDRs and advanced sales, these companies continue to flex their muscles in complementary areas of growth to optimize their business and increase overall value.
Leading the tech industry is no easy feat, but with world-class innovators and the progressive development of competitive technology, Israel is a ripe region for the growth of promising startups. While it is still quite early to tell, 2018 is poised to be another momentous year for startups based in the country and, without a doubt, will continue to be the subject of a watchful eye from companies and decision-makers across the globe!