Israel is handled as the #1 startup ecosystem outside the Silicon Valley. For our series about different startup scenes around the globe, Israel was the perfect choice since the countries development was so special and rapid.
Just recently, Israel got named the Startup Nation.
Key Facts:
- over 7.000 startups
- 200 accelerators/incubators
- main startuo hubs of the country: Tel Aviv, Haifa
- expertise in Cyber Security, mobile
Current situation:
Israel has the highest venture capital per capita in the world with 425.000$ per 1.000 people. Regarding the types of business, you can say that there is a tendency towards B2B startups. On major reason why Israel was called the Startup Nation is that the rate ob business discontinuance is only at 5,3% which means that nearly 95% of entrepreneurs starting a business also continue with it. Looking at it’s current state one sees that Israel managed to continually gro better over the years.
It is not a coicidence that there are so many startups coming from Israel.
Reasons for success:
- The population of Israel share three traits making them great entrepreneurs:
- Tahkles (sense of purpose)
- Rosh Godol (tendency to challenge authority)
- Chutzpah (shameless audacity)
- high level of venture capital available
- small local market and a huge diaspora gives startups the strong capability to export tech
- there is a strong culture in Israel for innovation: people see many startups are being promoted and sold and doing great stuff, it gives you motivation to create more
- between the different players, there is a high level of knowledge sharing. That assists the entire ecosystem to quickly evolve and develop elegant solutions that assist global cooperations.
- geographically: Israel is a small place, you don’t have long drives to go to a different place
- Many business relationships are vaunted in the Israeli Defense Force, which is very forced to develop own technologies
- Due to the history of the country’s origins, people were confronted early on with having few resources -> strong need to find innovative solutions that work quickly
Speaking of the advantages of that ecosystem we need to consider the unattractive side of Israels startup scene. Especially for foreigners, the geopolitical context of Israel will never be easy and sometimes it can be unsave. People planning to start a business in Israel need to consider the fact.
But, if you still are willing to go to Israel and become an Entrepreneur, here is a list of supporting programs:
Support by the government:
The Israeli government has its own innovation authority that approves the applications to the specific grants:
- TNFUA program for young entrepreneurs. As an entrepreneur you can apply for it if you can proof the technological feasibility and the commercial realisation for your idea.
- Incoubator-incentive-programm: loans that must be paid back in the event of success
- makes the financing of risky projects possible
- Renewable Energy Technology Center: supports Ideas in the segment renewable energy and energy efficiency
Support by banks:
Extra service models have been created with bankers who are technically versed.
Money is also given to companies that lose money in the first step and would therefore not be creditworthy.
Support by non-profit organisations:
Startup Nation Central connects companies and governments from around the world with Israeli innovations and offers Israeli innovations a potential market.
For now , these are the most important facts you need to know about the Israeli startup scene. If your intersted in the global topic stay tuned. Next time, we will be looking at the ecosystem in Germany.