Visiting my grandparents was always special to me as a child. Not only was it special that they were in Israel, but my grandmother made the most extraordinary potato salad. She passed on the recipe to her mother. Now, whenever I go to America to see my girlfriend’s mother, I’m sure I’ll be able to taste that delicious dish again. And I know it tastes like my grandmother’s.
That’s the great thing about recipes. Of course, every cook has their own way of making a dish special, but if you follow the same recipe, you can be confident in the outcome.
Known as a start-up nation, Israel has positioned itself as a pioneer in innovation and technological prowess. Its thriving ecosystem constantly generates breakthrough ideas and brings them to fruition. For that reason alone, investing in Israel is always a good idea.
Can Israel maintain its identity as an emerging nation?
But in the aftermath of October 7, and with the war still ongoing, is the Israeli state resilient enough to continue to believe in its innovation and future?
Before delving into where we are today, it is important to assess the technology landscape in Israel before October 7th. The statistics speak louder. With over 7,600 start-up companies, more than 10% of the country’s workforce is employed in the technology sector, contributing to 20% of Israel’s economic growth rate. GDP. Additionally, Israel is home to more than 500 multinational research and development (R&D) centers, including technology giants Intel, Google, and Apple.
IVC Research Center data outlines Israel’s technological achievements. From 2015 to 2022, a staggering $77 billion was invested in Israeli technology companies, with 98 unicorns valued at a total of $275 billion. Israeli venture capital (VC) funds have raised $25 billion, demonstrating the country’s robust investment climate despite the global tech downturn. Additionally, Israel leads the world in the rate of engineers and scientists per capita and fosters a culture of innovation and expertise.
Yes, Israel is known as the start-up nation, but how does the small country actually do business?
The answer is that our country has a proven recipe of government support, academic excellence, military service, and a culture of innovation.
government support: The Israeli government actively promotes innovation by attracting global companies, providing generous subsidies to entrepreneurs, and establishing hubs and accelerators to support startups.
Academic excellence: Prestigious academic institutions act as hotbeds of innovation and drive innovation.
Military service: Compulsory military service develops skills and resilience, and many serve in intelligence units that foster a culture of innovation and grit. Israel Defense Forces “graduates” also learn the importance of working in teams from a very early age. At IDF, it’s never about “me.” It’s about the task at hand.
Culture of innovation: There are children in Israel who begin thinking about entering high-tech fields from an early age. The whole country celebrates our innovation and the government openly communicates that it is our present and our future.
October 7th was a pivotal moment for Israel, impacting many aspects of the country, including its technology ecosystem. Despite challenges, including a 15% decrease in capital raised and a 16% decrease in deal volume in the fourth quarter of 2023 compared to the third quarter, Israel remains resilient.
Israeli and foreign investors have been selective in their focus on supporting portfolio companies, but after more than 100 days of combat and/or the IDF’s role supporting companies in operation, the IDF’s preparedness The return of gold to the home of tech startups is injecting new energy into Israel. Ecosystem. Despite a bear market and falling valuations, Israel’s technology sector remains strong, driven by the brightest minds creating disruptive technologies. It’s all because we have a recipe that keeps working.
Wellness technology opportunities: Among sectors ripe for investment, wellness technology backed by science and data stands out. In the U.S. health care landscape characterized by an aging population and an increase in chronic diseases, prevention has become paramount. Israel’s 500 wellness startups and 1,580 life sciences and health technology startups are poised to meet these challenges. Approximately $2 billion will be raised by life sciences and health startups in 2022, and the sector shows immense promise.
The Global Wellness Institute values the wellness market at $5.6 trillion, and it is projected to reach $8.5 trillion by 2027.
Israel’s position at the forefront of wellness technology is facilitated by a centralized and stable healthcare system, supportive government policies, and experienced founders who have transitioned from the traditional technology industry. Once again, Israeli recipes are at the core of the country’s wellness startup ecosystem.
There are very few certainties in life. The cliché is “death and taxes”, but I don’t agree with that. I would add her grandmother’s potato salad recipe (her sugar cookies are also great, but that’s for another day). And I would also like to add the innovation success of the Israeli startup ecosystem.
Investing in Israeli innovation offers unparalleled opportunities. Despite recent challenges, Israel’s resilience, agility, and boldness continue to propel the health technology ecosystem forward. With its heritage of innovation and burgeoning wellness technology sector, Israel continues to be poised to deliver breakthrough solutions that will shape the future of global industry.
Now is the time to invest in Israel, the innovation powerhouse.
The author is a co-founder and partner at WellTech Ventures. Her passion is investing in wellness and health tech startups, and she brings extensive experience in business development and mergers and acquisitions (M&A).
