Acquisitions of Israeli high tech companies rose to almost $6.5 billion last year, in yet another fantastic year for Israeli startups. With 2012 closing seeing around 80 companies in Israel purchased by foreign companies for over $60 million each, and now 2013 closing with several companies bought for over $800 million, Israel is clearly on track for giving Silicon Valley a run for its money. Most notably among the recent acquisitions: Apple buying PrimeSense for $354 million, Google buying Waze $1 billion, and IBM buying Trusteer for $800 million, giving hopeful entrepreneurs additional motivation to pursue their dreams.
With more companies listed on the NASDAQ stock exchange than any country outside the US and China, it’s no wonder Israel continues to be undeniably one of the leaders for creating successful startups. So what is behind this?
Bill Gates has complimented the high quality education, and it can certainly be argued the three years mandatory army service with early intimate exposure to advanced technologies certainly plays a part. As well as this, governmental support from the Israeli government by reducing obstacles and lowering associated taxes to encourage this boom has impacted this. Consequently more Israelis and immigrants are taking higher risks, creating more startups and driving this hugely successful technology boom.
Unfortunately, investors often find it difficult or impossible or access startup investments in Israel’s technology sector. Unless one is directly connected to someone in the startup or happens to be in the right place at the right time, it is more than likely that valuable potential investors can often miss the boat. This is detrimental to both the investors who miss out on substantial capital returns, as well as a large number of profitable startups that are unable to be sufficiently funded. However, a number of groundbreaking solutions have arisen to combat this.
The primary process used for this is correspondingly one of the foundations of Israeli culture: networking. Several channels of networking have emerged to connect potential investors with startups. These exist both on a virtual platform in places like Facebook groups as well as in-person networking events. An example of this is CleanIsrael , which create events across Israel to provide an opportunity for companies and investors to connect locally. Also there are companies bridging the gap on an international scale between countries like America and Israel to provide opportunities for angel investing such as Tevelglobal, a global angel investor community and fund. Moreover, there is the revolutionary model of OurCrowd. OurCrowd founded by Jon Medved, a leading venture capitalist, created a totally groundbreaking model of equity-based Crowdfunding of startups from international investors.
All of these channels are ensuring even more startups are given the opportunity to thrive through both crucial investments, as well as oftentimes optimal connections with peers who can also contribute to the strength and growth of the startups.
Connecting previously inaccessible investors, from across the world, with a multitude of startup opportunities, can only work towards propelling Israel even further into the startup revolution that will be carrying it through the foreseeable future.