Over the past three decades, Israel has emerged as a global powerhouse in technology and innovation, with over 40% more unicorns than in any country in Europe. As someone who has invested in over 30 Israeli companies over the past 12 years, we sat down with our Managing Partner Victoria Palatnik to talk more about the market overall, and how she and we at Raw Ventures are tapping into the talent and endeavours of the country.
As an investor, what attracts you to Israeli startups?
“With its dynamic startup ecosystem, Israel has become a hotbed for entrepreneurs, venture capitalists, and multinational corporations seeking groundbreaking technologies. From the development of cutting-edge cybersecurity tech to web and app solutions simplifying once arduous tasks, Israeli startups have made a significant impact on the global stage.
The combination of a strong focus on research and development, and a culture that embraces risk-taking, has fueled entrepreneurial activity. The government’s incentivisation policies introduced in the 1990s to support startups through grants, proved a huge boost to entrepreneurialism, with a rapid increase in startups from the turn of the century onwards. Add to that a highly skilled talent pool, with education from world-class academic institutions, such as the Technion-Israel Institute of Technology and the Weizmann Institute of Science, the country quickly became the perfect environment for innovation to flourish.
Israeli startups have been proactive in forging valuable partnerships with major players in the tech industry, such as Google, Microsoft, and Intel, to further technological advancement. These collaborations allow for knowledge-sharing, mentorship, and accessibility to necessary resources. In addition, former employees of major players and startups go on to found their own startup companies at a far greater rate than in other countries, transferring their technological knowledge to a new project, and new potential unicorn.
This kind of innovation was evident to me Bizzabo - a company I invested in early on, that has gone on to have incredible success. Their unique approach to managing events and their efficient event software demonstrated a deep understanding of what currently wasn’t working for those running events, either in person or virtually. Graduway was another early investment for me into an Israeli startup. Identifying a gap in the market for efficient alumni management platform, Graduway, now Gravyty, developed intricate and user friendly software that services thousands of colleges and universities worldwide.
What tendencies and trends do you find most valuable in this market?
“There are many incredible and influential startups of the past decade that have come out of Israel which, I’m sure, many people would have no idea are Israeli, and would simply assume they’re American or European. Their success comes down to developing truly original solutions with technology and distinct innovation.
Wix is an obvious one to mention. The web development platform allows users to create and manage websites, without the need for coding skills. Founded in 2006, Wix has grown rapidly, empowering millions of individuals and businesses worldwide to establish their online presence, without the need for hosting or managing servers. Their intuitive drag-and-drop interface and design options have made the service the most popular website creation platform and a unicorn, listing on the NASDAQ in 2013.
Waze’s rise since being founded in 2007 is also incredibly impressive. Waze is a community-based navigation and traffic app that revolutionised the way people navigate and commute. Waze has been able to distinguish themselves from the navigation juggernauts like Google Maps or TomTom, thanks to its crowd-sourcing approach, where users contribute real-time traffic and road information to provide accurate and up-to-date navigation data. Google actually ended up acquiring Waze in 2013 for $1.1B USD.
Via Surgical develops surgical navigation and visualisation systems to enhance surgical procedures. Their flagship product, the FasTouch™, has proven to reduce the risk of complications such as leaks, infections, and dehiscence after multiple types of surgery. As of early 2021, its valuation was estimated to be around $1 billion.”
Which Israeli startups have Raw Ventures invested in?
“There are so many Israeli startups right now that are leading in innovation with the potential to grow significantly and truly transform their respective industries. That is why we at Raw Ventures have invested into some of the most interesting startups coming out of the country.
Agtech is a rapidly growing field, with a focus on automation and optimisation of crop growing. Fermata has developed state-of-the-art AI tech, to aid crop loss mitigation solutions, thanks to a team of experts across multiple disciplines. For an industry that is still heavily reliant even to this day on manpower and human interventions, Fermata has laid the groundwork to become a major player in an industry worth $300B.
EZbra are revolutionising the world of surgery. The female-founded company has developed a disposable all-in-one breast dressing to address the immediate post-op wounds after multiple types of procedures. Their solution serves an unmet need for women worldwide.
With the ever-growing emphasis on sustainability, startups like Balena and Beyon3D are breaking the mould in the construction of materials. A material science company, Balena has created a 100% biodegradable, compostable and durable thermoplastic material, for the production of footwear. Their shoes, now on sale, are sustainable, functional and earth-friendly. As for construction startup Beyon3D, they have developed new concrete materials to utilise 3D and industrial robotics to create a seamless value chain in concrete products. Their approach reduces the manufacturing time, wastage, machinery needed, maintenance costs and the energy needed for production.
Of all of the Israeli startups that truly excite me, I’m proud that we at Raw Ventures have invested in Fermata, EZBra, Balena and Beyon3D. As we at Raw have a deep passion for innovation ourselves, we relish the opportunity to help shape these startups toward overwhelming and global success.”