In a small country roughly the size of New Jersey, poor in natural resources and rich in security challenges, and with a population of just over 9 million people, there are more startups per capita than any other country in the world.
In Startup Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer highlighted the culture that gave rise to the avalanche of successful innovations born and nurtured in Israel. It’s a culture that encourages initiative, entrepreneurship and risk-taking, and values debate, contrarian opinions, and questioning authority. Senor and Singer quote the Israeli writer Amos Oz: “Doubt and argument—this is a syndrome of the Jewish civilization and this is a syndrome of Israel today.”
Alluding to the current political turmoil in Israel, President Isaac Herzog said last week in Jerusalem at the OurCrowd Global Investor Summit 2023: “I truly believe that this historic moment in the story of the State of Israel is actually an exemplification of the unique stature of our society and the way it is so exciting, the way it is open, the fact we debate so many issues… we are at a critical juncture in a national debate about the way our democracy is structured. I think the same way you see the innovative spirit of the State of Israel, you also see it in this debate.”
Speaking at the OurCrowd Summit, Avi Issacharoff, co-creator of the popular Israeli TV series Fauda, contrasted the typical Israeli conversational style with what he encountered abroad: “In Israel, when you have differences of opinion, people shout at each other. Overseas, if something is boring, people will say, ‘That’s interesting.’”
It’s not just style, it’s mainly substance. At the Summit, Saul Singer talked about the crisis of the modern world—a crisis of meaning, of loneliness, of community—arguing that the thriving, diverse, equitable startup nation can serve as a model to others. While other countries are shrinking and aging, “we are young and growing… The greatest invention of Israel is Israeli society itself,” said Singer.
What the 9,000 attendees from 81 countries saw at the OurCrowd Summit was a wide-ranging display of the innovations created by Israeli society and its unique culture. First and foremost OurCrowd itself, founded by CEO Jon Medved in 2013 with “the vision of democratizing world-class venture capital investing.”
Today, OurCrowd serves as a global investment platform for over 220,000 registered members from 195 countries that co-invest from as little as $10,000 in the companies and funds of their choice. OurCrowd has over $2.1 billion in commitments, has deployed capital into 380 portfolio companies and 42 funds across five continents, and has recorded 61 exits including several public market listings.
OurCrowd’s success has mirrored the flourishing of Israel’s economy and the growing VC interest in the country’s startups. Israel’s GDP was $297.7 billion and GDP per capita was $36,957 in 2013. The GDP figure in 2021 was $488.5 billion and GDP per capita was $52,152. Israel’s ranking of GDP among 196 countries rose from #37 in 2013 to #30 in 2021. Venture capital investments in Israeli technology startups rose from $1.928 billion in 2013 to $14.95 billion in 2022, according to IVC.
A key financial catalyst for the rise of startup nation was Yozma, a government program established thirty years ago to encourage venture investments in Israel. GDP was $77.3 billion and per capita GDP $14,708 in 1993. There were no local VCs at the time, very few startups, and very little presence of established global companies (McDonald’s opened its first restaurant in Israel in 1993).
Today, IVC counts 9,501 active high-tech companies in its database and Startup Nation Central counts 402 multinationals with an Israeli presence. There were 1,087 representatives of large, global companies among the attendees at the 2013 OurCrowd Summit.
Highlighted at the Summit were innovations aimed at saving the planet and saving individual lives. For example, BlueGreen Water Technologies’ water-based carbon removal technology has succeeded in removing 3.3 million tons of carbon to date, rehabilitating entire aquatic systems, reintroducing biodiversity to lakes and oceans and supporting the lives and livelihoods of people who relied before on contaminated water bodies; Surgical Theater saves lives by adapting flight simulator technology to complex medical procedures; ThetaRay’s cross-border transaction-monitoring system helped uncover a human trafficking crime ring in Europe; UBQ Materials’ sustainable plastic substitute is used in several industries, including bringing automotive manufacturing into a sustainable future; and Flash Forest, Canada’s largest drone reforestation company, will plant over one million trees in remote forests in North America over the next two months.
Following the Abraham Accords, these innovations and the startups and VCs behind them recently found new commercial opportunities in the Middle East. During his Summit keynote address, Acting Director General of the Abu Dhabi Investment Office (ADIO) Eng. Abdulla Abdul Aziz AlShamsi, said that “Abu Dhabi believes in the power of partnership to drive innovation and support sustainable investment opportunities. Following the success of companies like OurCrowd in the UAE capital, Abu Dhabi’s ability to move quickly and support growth is drawing interest from across Israel’s startup ecosystem.”
Thomas Nides, U.S. Ambassador to Israel, observed that “The Abraham Accords made Israel a stronger democratic Jewish state. The early adopters created an unbelievable message to the world. It just makes the region stronger and just makes Israel stronger.”
Former Israel Ambassador to the U.S., Michael Oren, said at the Summit that “Israel has a remarkably resilient society.” Historian Gil Troy recently explained the substance and style of Israel’s resiliency: “Israelis’ ties to one another run deep, in constructively democratic ways. Israelis in all sectors have a strong sense of family, of community, of tradition. The Israeli birthrate of 2.2, the OECD’s highest, reflects the country’s stability, values, and optimism about the future. Many weddings and holiday meals feature Israelis from right to left, from secular to ultra-Orthodox, celebrating together—and yes, sometimes shouting about politics and religion together, too.”
Against all odds, for seventy-five years, Israel has gone from strength to strength based on this inner strength: the culture of debate, nonconformity, initiative, and entrepreneurship. It serves as an example to others and it promises to continue to innovate to improve our lives.
Here’s how Jon Medved sees what’s coming: “Clearly building successful startups is in our DNA and I expect that this will continue. However, the challenge for the next 10 years will be whether we can create much larger companies, such as Mobileye, Check Point and SolarEdge. This move from startup nation to scaleup nation is clearly high on everyone’s collective agenda and is what gets many venture capitalists out of bed in the morning to make this new reality happen.”
