Follow the recipe
Now is the time to invest in Israel
Visiting my grandparents was always special to me when I was a young child. Not only was it special that they were in Israel, but my grandmother made the most exceptional potato salad. She passed the recipe on to my mother, and now, anytime I go to the States to see my mother, I know that I will get to taste that delicious dish again. And I know it will taste like my grandmother’s.
That’s the amazing thing about a recipe. Of course, each cook has their own way of making a dish special, but if they are following the same recipe, you can feel confident in the outcome.
Israel, renowned as the Startup Nation, stands as a beacon of innovation and technological prowess. Its thriving ecosystem consistently produces groundbreaking ideas and brings them to life. For that reason alone, it’s always been a good idea to invest in Israel.
However, in the aftermath of October 7, and with the country continuing in its current war, is the resilience of the Israeli nation enough to continue to believe in its innovation and future?
Before delving into where we are today, it’s crucial to appreciate Israel’s tech landscape pre-October 7. The statistics speak volumes: Over 7,600 start-ups, with over 10% of the country’s workforce employed in the tech sector, contributing 20% to the GDP. Furthermore, Israel boasts over 500 multinational research and development (R&D) centers, including tech giants Intel, Google, and Apple.
Data from IVC Research Center outlines Israel’s tech achievements. Between 2015 and 2022, a staggering $77 billion was invested in Israeli tech companies, with 98 unicorns valued at a combined $275 billion. Israeli venture capital (VC) funds raised $25 billion, showcasing the nation’s robust investment climate even while a global tech downturn was taking place. Moreover, Israel leads globally in the percentage of engineers and scientists per capita, fostering a culture of innovation and expertise.
Sure, Israel is known as Start-up Nation, but in reality, how does Israel, a small nation, do it?
The answer is that our country has a proven recipe: Government support, academic excellence, military service, and a culture of innovation.
Government support: Israel’s government actively fosters innovation by attracting global companies, offering entrepreneurs solid grants, and establishing hubs and accelerators to bolster start-ups.
Academic excellence: Prestigious academic institutions serve as breeding grounds for technological breakthroughs, driving innovation.
Military service: Mandatory military service cultivates skills and resilience, with many serving in intelligence units which foster a culture of innovation and grit. Israel Defense Force “graduates” also learn at a very young age the value of working with a team. In the IDF, it’s never about “me”; it’s about the task at hand.
Culture of innovation: From an early age, there are Israeli children who are beginning to think about going into hi-tech. The country, as a whole, celebrates our innovation and the government openly communicates about it being our present and future.
OCTOBER 7 marked a pivotal moment for Israel, impacting various facets of the nation, including its tech ecosystem. Despite challenges such as a 15% decrease in capital raised
and a 16% decline in the number of deals in Q4 2023 compared to Q3, Israel remains resilient.
While Israeli and foreign investors exhibit selectivity, focusing on supporting portfolio companies, the return of IDF reserves to their tech start-up homes, after more than 100 days of combat and/ or IDF roles supporting those in action, is injecting renewed energy into the ecosystem. Despite the bear market and lower valuations, Israel’s tech sector remains unwavering, driven by brilliant minds creating disruptive technologies. It’s all because we have a recipe that continues to work.
Opportunities in wellness technology:
Among the sectors ripe for investment, wellness technology, backed by science and data, stands out. With a US healthcare landscape marked by an ageing population and a rise in chronic disease, prevention becomes paramount. Israel’s 500 wellness start-ups and 1,580 life science and health-tech startups are poised to address these challenges. With approximately $2 billion raised by life science and health startups in 2022, the sector shows immense promise.
The Global Wellness Institute values the wellness market at $5.6 trillion, projected to reach $8.5 trillion by 2027.
Israel’s position at the forefront
of wellness technology is facilitated by a centralized and stable health system, supportive government policies, and experienced founders transitioning from traditional tech industries. Once again, Israel’s recipe is at the core of the country’s wellness start-up ecosystem.
There are very few sure things in life: The cliché is “death and taxes,” but I don’t agree with that. I’d add my grandmother’s potato salad recipe (Her sugar cookies are also amazing, but we’ll save that for another time), and I’d certainly add the Israel startup ecosystem’s innovation success.
Investing in Israeli innovation presents an unparalleled opportunity. Despite recent challenges, Israel’s resilience, agility, and boldness continue to drive its health-tech ecosystem forward. With a legacy of innovation and a burgeoning wellness technology sector, Israel remains poised to deliver groundbreaking solutions that shape the future of global industries.
Now is the time to invest in the innovation powerhouse that is Israel.