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IATI - Israel Advanced Technology Industries
IATI - Israel Advanced Technology Industries
IATI News & Events Daily Industry News Israel's Big Tech Sector Looks to Produce Bigger Companies

Israel's Big Tech Sector Looks to Produce Bigger Companies

Oct. 25, 2013

Try as you might, it is extremely hard not to be a bit star-struck by the Israeli technology scene. Just when you think you have seen everything, along comes something even more impressive, such as a startup with a nanotechnology that has the potential to disrupt everything from batteries to display screens to semiconductors.

But can the country continue to deliver in the way it has, and what is next for the startup nation?

It is the scale of Israeli ambition that other startup ecosystems outside the U.S. seem incapable of matching. "It is Silicon Valley for the rest of the world," said Saul Klein, a London-based venture capitalist and recently appointed a U.K. tech envoy to Israel.

What's the secret? Reasons include the role of the Israeli Defense Forces, and in particular the high-tech Unit 8200; the unique cultural values of a country forged from centuries of oppression; and Jewish mothers. Yossi Vardi, the larger-than-life so-called father of the Israeli tech scene, favors that last theory. "From birth," he said, "your mother will tell you that you have to succeed, that you have to be better than your cousin, or her friend's son, or whoever."

But what is next for Israel? Certainly there doesn't appear to be any slowing down. Recent acquisitions by Google of crowdsourced traffic app Waze for a reported $1.1 billion, and by Facebook of mobile-data-compression service Onavo (which our sister title All Things D reported was for $120 million), show the lure of the eight-million-strong nation hasn't tarnished. So does Amazon's recent announcement that it is to open an R&D center in Israel.

According to Chemi Peres, managing general partner and co-founder of the Herzliya-based Pitango Venture Capital, things are changing. "There is [now] a notion of, 'Let's build bigger companies,' and not to sell them at $200 million. This is a cultural change. Look at companies like Waze or Trusteer." Trusteer, a security firm, was acquired in August by IBMץ The Wall Street Journal reported the deal was worth between $700 million and $1 billion.

For the full feature story on The Wall Street Journal click here.

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