Israel

Tel Aviv #7 *
Ecosystem rank and metrics for Tel Aviv - Jerusalem

MEMBERS:
Tel Aviv Global

Tel Aviv has shown tremendous growth and maturity with many startups evolving into scaleups, unicorns and public companies. As a leading global investment business, we are excited for the opportunities presented in one of the most dynamic and innovative markets in the world.

Yifat Oron
Senior Managing Director. Blackstone . Head of Tel Aviv Office
Top 10 Global Ecosystem: Performance
Top 10 Global Ecosystem: Funding
#1 MENA Ecosystem: Knowledge

Highlights

Tel Aviv might be of modest size but Israel’s high-tech capital is one of the leading cities in the world for innovation and technology. The beating heart of the “Startup Nation” boasts one startup for every 154 residents, the world’s highest ratio. Creative and experienced talent, a mix of local and international investors and 2,750 startups call this ecosystem home. The “Startup City” hosts 115 foreign R&D centers with a vast range of multinational companies using the city as a base for innovation. The well known tech giants like Google, Microsoft, Facebook, Amazon and Apple, together with Nike, Mastercard, Ford, booking.com, bosch, come for the talent and entrepreneurial spirit and benefits from the country’s high expenditure on R&D - the second-highest rate of R&D spend per capita in the world. A recent surge in VC money into Tel Aviv has only improved the conditions for growing companies. The ecosystem saw a 25% increase in capital raised in 2020, with over $6.8 billion flowing into its startups last year which doubled the number of unicorns in Tel Aviv. It is now home to more than 20 private companies worth more than $1 billion. With rounds of $200 or $300 million not uncommon, local success stories are numerous and include Monday.com, which raised $150 million from Zoom and Salesforce in June 2021 as part of its IPO, and mobility-as-a-service startup Moovit, which was acquired by Intel for $900 million in May 2020. Notable ecosystem events include Axis Tel Aviv, DLD, Fintech Week, and CybertechGlobal which provide local entrepreneurs the opportunity to network with leading members of the international startup scene.

Ecosystem by the numbers

TOTAL EARLY STAGE FUNDING
$4.5 bn
GLOBAL AVG.
$548 m
ECOSYSTEM VALUE
$61.6 bn
GLOBAL AVG.
$13.68 bn
MEDIAN SEED ROUND
$1500 k
GLOBAL AVG.
$480 k
MEDIAN SERIES A ROUND
$5.8 m
GLOBAL AVG.
$3 m
SOFT. ENGINEER SALARY
$90 k
GLOBAL AVG.
$44 k

Sub-sector Strengths

AI, Big Data & Analytics

Tel Aviv is seventh in the world by number of AI startups, with 714 companies and a total of $3 billion invested in 2020. A new AI plan calls for $1.6 billion to further grow the sub-sector over the next five years and has already unlocked initial funding of $168.2 million. In June 2021, ZenCity, an AI solution for governments, raised $30 million and digital adoption platform WalkMe raised $286.75 million in an IPO.

Cybersecurity

2020 was a record-breaking year for Tel Aviv-based Cybersecurity companies, raising $2.9 billion in total. In just Q1 2021, the sub-sector raised $1.5 billion across 17 deals. Three unicorns continued their growth in 2021, enterprise networking and security company Cato Networks raised a total of $332 million, cloud infrastructure company Wiz raised a total of $350 million and Aqua Security raised a total of $265 million. Tel Aviv University hosts Cyber Week, one of the top cybersecurity events in the world.

Reasons to move your startup to Tel Aviv

Intellectual Property Incentives

A company that creates IP assets in Israel, or is willing to transfer some IP to Israel, is entitled to reduced corporate, dividend, and capital gains tax rates. The country’s Angel's Law also provides tax benefits and deductions to single investors who invest in Israeli companies during their initial R&D (seed) stage.

Employment Aid Programs

The Israeli Ministry of Economy offers wage subsidies for new employees for a specific period of up to several years depending on the program. Subsidy rates range from 10% to 40% depending on the employee’s background (i.e. students, workers from minority groups), and the amount of time the employee has been already working in the position.

R&D Grant Programs

The Innovation Authority operates more than 40 R&D grant programs for multinational companies, individual entrepreneurs, research institutions, and NGOs. The programs offer a unique, customized, and comprehensive incentive “toolbox,” including Innovation Labs programs, which offer up to a 50% deduction in R&D expenses for specific sub-sectors.

Startup Community

Startup Genome
Members

Startup Genome
Partners

Future Block Coworking
Future Block Programs
Geektime
Microsoft Ventures
Microsoft for Startups
SOSA
Startup Nation Central
Techstars

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