Feature Story

How Tel Aviv’s tech ecosystem thrives

by Melissa Jun Rowley

Smart City Tel Aviv

A look at what's driving Israel and Tel Aviv's tech ecosystem forward.

Israel is home to more startups per capita than any other country, and attracts more venture capital per person than anywhere on the planet. In Q2 of 2016, Tech EU reported that Israel took the number one spot in total funding—$1.1 billion dollars. With a population of only 7.9 million people, it seems unlikely that Israel would grow such a booming tech economy. But for the past five years, Tel Aviv has become widely known as a hotbed for innovation and tech startups. The country is even opening an innovation center to continue spurring new ideas, and to encourage young entrepreneurs to keep the tech dream alive.

Israel is home to more startups per capita than any other country, and attracts more venture capital per person than anywhere on the planet. Julia Bayer, trade and investment advisor at the Embassy of Israel, advises and assists Israeli startups in developing their business strategy, raising capital, and securing global clients and partners. She attributes her country's tech boom to the Israeli military.

"I think the most obvious reason as to why Israel succeeds is the army," says Bayer. "Unit 8200, which is the cyber and intelligence division, is the largest unit in the army. So a huge proportion of 18-year-olds are facing technological challenges, and being forced to deal with them without prior training, which encourages creativity and out of the box thinking."

See also: Cisco and Israel Announce Partnership to Accelerate Country Digitization

Bayer says Tel Aviv's tech ecosystem is growing and being democratized, due to a rise in equity crowdfunding, growth in accelerator programs serving underrepresented members of society, and efforts to bring more women into the tech sector. 

What crowdfunding platforms are leading the charge in Israel's tech community? 

Founded by Shelly Hod Moyal and Mor Assia, the iAngels platform allows investors from other parts of the globe to co-invest in startups alongside reputable Israeli angel investors. The Tel Aviv-based crowdfunder has raised $14 million as of March 2016.

About 70 kilometers away in Jerusalem, OurCrowd facilitates investments among accredited investors, venture capital firms and vetted angel investors. Led by CEO Jon Medved, the platform has secured a $10 million investment for its own operations, and has invested over $230 million in more than 100 portfolio companies. 

How is Israel's tech community helping underrepresented groups? 

Israel currently has more than 260 startup accelerators nurturing and funding tech entrepreneurs. One of the most original programs is bringing ultra-Orthodox (Haredi in Hebrew) women into the tech industry. The company Comax outside Tel Aviv employs 20 of these women, who produce computer programs for nearby supermarkets.

According to a report released last year by the National Insurance Institute, 54% of ultra-Orthodox citizens were found to live below the poverty line in 2014. Along with Comax's program for women, Kamatech accelerator aims to address this issue. The program introduces Haredi entrepreneurs to the startup world, while providing them with tools and resources to get their innovations off the ground. 

See also: Country Digitization Acceleration

In addition to ultra-Orthodox women and the Haredi population overall, Israel is making it a priority to support more women-led startups at large. The Israel Ministry of Foreign Affairs ran its Start TLV competition for the fifth time this year with a focus on women in tech. To address the fact that very little investments go to female-founded startups, only applicants with at least one woman founder could enter the competition.

There is also a focus on bringing women into the sector through mentoring.

"One amazing example I've seen of a startup addressing the lack of women in the tech sector is Lean On," says Bayer. "The organization facilitates virtual mentoring from women for other women. As a woman in the workforce, you are facing so many problems and issues, every single day. It's time for someone to acknowledge it, and solve it. That's what Lean On was built to enforce."

With Tel Aviv's tech scene showing no signs of slowing down, enforcing the value of women and other underrepresented groups in technology is definitely making a dent in the status quo in Israel and tech communities across the globe.  


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