Tel Aviv Leads: Discover MENA’s Top Startup Ecosystems
Israel
Tel Aviv
MEMBERS:
Tel Aviv Global
“Israel is one of Nvidia's largest hubs in terms of population ratio. It's also home to some of our most talented engineers. One of our most significant investments, NVSwitch, originated from Israel.”
Highlights
Tel Aviv is a world leader in startup innovation and a model of the power of resiliency. The Israeli high-tech sector is the engine of the nation’s economy, accounting for 18% of its gross domestic product, 48% of exports, and 11% of its workforce. Despite a globally challenging year for funding, startups in Israel raised $7 billion in 2023, a return to the levels of investment from 2018 and 2019, before the relative anomalies of peak years in 2020 to 2022.
Tel Aviv startups are bolstered by a strong network of VC funds. In January 2024, VC firm Cardumen Capital, which invests in early-stage software and hardware startups, raised $120 million for its second fund. In July 2023, VC TLV Partners announced its fifth fund worth $250 million. In August 2023, early-stage VC fund Symbol closed its inaugural fund raising a total of $50 million.
Tel Aviv is a booming hub for international and local innovation centers. Volkswagen, Citi, Hyundai, and Visa host their innovation centers here, and several new centers are planned. In May 2023, Tel Aviv University (TAU) launched an aggregation center for innovation. In December 2023, the Israeli government announced a $27.6 million initiative to establish nine innovation centers. Luxury automaker Jaguar Land Rover announced in 2023 that it is launching an innovation hub for digital technologies and mobility software solutions. Japanese insurance giant Sompo announced in 2023 that it would open a cybersecurity center in Israel and Amazon Web Services Amazon Web Services announced the launch of the AWS Israel Tel Aviv Region as part of Amazon’s plan to invest $7.2 billion in Israel through 2037.
Ecosystem by the Numbers
NUMBER OF UNICORNS
(H2 2021 - 2023)
Sub-Sector Strengths
AI, Big Data & Analytics
Google and Tel Aviv have a rich collaboration that promotes Israeli AI. In January 2024, Google launched a $4 million fund to support 20 AI startups in Tel Aviv with financing and mentorship in development, strategy, and marketing. In May 2023, TAU partnered with Google to launch a program for the promotion of AI and data science research. Google pledged $1 million to accelerate AI research, fund collaborative research projects, and support diversity and inclusion initiatives at TAU in May.
Cybersecurity
In August 2023, Check Point Software Technologies purchased Cybersecurity startup Perimeter 81 for $490 million. Cybersecurity startup Silverfort raised $222.5 million over eight rounds, including a January 2024 Series D. Cybersecurity company BioCatch raised $323.7 million over nine rounds, including one in November 2023. In July 2023, Tel Aviv hosted the CISO Summit, a flagship Cybersecurity event that attracted over 130 global senior executives from international companies including Oracle, Microsoft, General Motors, and Unilever.
Life Sciences
In 2023, Quantum software pioneer Classiq announced it would partner with NVIDIA and the Tel Aviv Sourasky Medical Center to launch the Quantum Computing for Life Sciences & Healthcare Center. In 2023, the European Innovation Council Pathfinder Challenges program awarded The George S. Wise Faculty of Life Sciences at TAU with a $4.4 million research fund. Purple Biotech raised $71.5 million over six rounds, including one in October 2023. National Life Science & Technology Week 2024 took place in Tel Aviv in May.
Reasons to Move Your Startup to Tel Aviv
Established Startup Scene
Tel Aviv is a melting pot of diverse startups, visionary investors, and cutting-edge events with a strong support system of mentors and accelerators. It has the highest density of startups per capita in the world. In 2023, Stanford University ranked TAU as the institution with the most unicorns established by alumni in the world, excluding the U.S.
Tax Incentives
In 2023, the Israeli Parliament passed the Law for Encouragement of Knowledge-Intensive Industry offering tax benefits to encourage investments and acquisitions in the tech sector including a withholding-tax exemption on interest tech companies pay to foreign financial institutions, a five-year tax amortization of acquisition costs for both Israeli and foreign companies, and a tax credit for individual investors calculated as a portion of the investment amount.
Dedicated Support
In October 2023, the Israel Innovation Authority (IAA) announced it would allocate $25 million in grants for 100 startups as part of its R&D fund program. Israel Tech MatchMaker, an AI-powered tool that matches investors to startups, launched in November 2023. The same month, IAA granted $2.4 million for the launch of three clubs of angel investors to help bolster investments into young Israeli startups.
Selected Startup Organizations
Startup Genome Members
Key Ecosystem Players
Guy Katsovich
Guy Katsovich is an investor, thought leader and social entrepreneur. He is the Managing Partner of Fusion VC, Israel's leading pre-seed investment platform and accelerator program, which he co-founded with Yair Vardi in 2017.
Iris Shor
A serial Entrepreneur, founder at Oribi that was acquired in 2022 by LinkedIn. Passionate about great products, creative marketing and bringing authenticity and vulnerability into companies' culture. A writer and a public speaker, sharing insights from her entrepreneurial journey.
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