window-cleaner
Business Management

Israeli Exits and Investment Point to Power of Tel Aviv

On my first visit to the city in three decades, I was told the 26th floor suite of the Intercontinental David Hotel in Tel Aviv offered glorious vistas across the esplanade and the Mediterranean. So at 7am, I strode to the windows overlooking the beach and pulled open the curtains… There, nine inches on the other side of the glass was the window-cleaner, 26 floors up, in a highly sophisticated cradle.

I thought it was either Batman or a Syrian attack because the experience was so out of context — rather like seeing a business acquaintance at a random family event — that I couldn’t recognise what I was seeing. After a hasty move to protect my privacy from the poker-face of the window-cleaner, this nasty surprise was soon forgotten.

Israel, of course, is the land of surprises and a lunch later that day with the ex-Israeli Ambassador to the UN, one of the EU peace envoys in the Middle East peace process, Israel’s most-decorated fighter pilot and the head of a $500m international fund, brought more surprises.

According to these gentlemen, peace with the Palestinians and the concomitant improvement in their economic conditions will mean the Palestinians can ‘protect’ Israel from hostile Arab states; highly contentious, albeit interesting.

What is beyond contention, however, is the growing power of influence of Tel Aviv as a tech hub. Known as ‘Silicon Wadi’, a term not particularly enamoured of locals, it is said that Israel has started more companies in New York’s NASDAQ exchange than all of India and Europe combined. This is according to the 2009 book, Startup Nation by Dan Senor and Saul Singer, a highly influential book for Israelis and one that has transmuted into a phrase that many tech entrepreneurs use to describe themselves and their peers.

In many ways a throwback to the early halcyon days of Israel when the farming collectives known as kibbutzim defined the national spirit, so the achievements of Israeli tech companies are evoked. Events since the book’s publication would seem to bear this out. The near $1bn sale of mobile navigation company Waze to Google was the super-exit that boosts startups and brings investors into the area. Arguably, it is also another way for the Jewish diaspora to support Israel without living there. Throw money at it, as my brother-in-law sometimes says.

These investors are certainly doing that. On 1 October this year, Israel-based Pitango Venture Capital announced that it had completed the fundraising for its new venture capital fund. It received commitments of $270m from China, India, Taiwan and Korea to invest in Israeli technology ventures, $20m more than the initial target.

Israelis are natural chatterboxes so networking comes easily to them and there were no shortages of offers when it came to finding companies to quote for this article, be they PR companies, the startups I met on my visit or those crowdsourced through social media.

But first I decided to speak to Lilach Bullock, a woman born in Israel but who works in London. She is somebody who straddles the Tel Aviv and London tech hubs and not only runs an agency, Socialable, and is listed in Forbes as one of the top 20 women social media power influencers in the world.

“There is a lot of energy in both London and Tel Aviv but the crucial difference for Tel Aviv is that its tech hub is concentrated in one place, not spread out like London’s is. This makes for an ecosystem that is very tight and connected and people in Tel Aviv tend to be more collaborative than those in other cities,” she says.

The number of startups in Tel Aviv is astounding. Whether it is GetTaxi, an app that calls taxi with one click, Fiverr, a marketplace where people offer services they will do for $5 or Viber, a free texting, photo messaging and video messaging service, the range of startups is extraordinary.

One such company is Yotpo, a social review platform that serves more than 15,000 websites. The platform brings more traffic to the website than Twitter and has more than 100 million conversations with consumers a month.

"Tel Aviv is an amazing city and the place to be if you are trying to build your first startup in Israel,” says Tomer Tagrin, founder and CEO of Yotpo. “The city has everything you need to build your business, from the best law firms, accountants, VCs and IT professionals in Israel to a large pool of very talented, smart and ambitious professionals. The combination of the easy-going, liberal atmosphere of the city and a vibrant tech scene full of experienced entrepreneurs wanting to give back makes Tel Aviv a special place for any entrepreneur.”

With an upcoming IPO for Outbrain, another of the city’s poster children and the recent sale of Snaptu to Facebook, the future looks bright for the tech cluster of Tel Aviv. Just make sure if you visit the city that your view isn’t obscured by a swinging window-cleaner on the 26th floor of the city’s Intercontinental David Hotel.

 

Monty Munford has written about digital innovation for Wired, the Daily Telegraph and many other titles, often looking at the impact technology has on Africa and Asia. He runs his own site at www.mob76outlook.com and has also starred in Bollywood films.

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Monty Munford

Monty Munford has written about digital innovation for Wired, the Daily Telegraph and many other titles, often looking at the impact technology has on Africa and Asia. He runs his own site at www.mob76outlook.com and has also starred in Bollywood films.

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