Israel's Hi-Tech Ecosystem is Progressing from Startup to Scale Up, Says GlobalData

Israel's Hi-Tech Ecosystem is Progressing from Startup to Scale Up, Says GlobalData

To scale up into global markets over the quick exit to international companies through mergers & acquisitions (M&A), Israeli hi-tech startups are increasingly keen on organic means. According to GlobalData, a leading data & analytics company, this drift will result in the growth of large homegrown multinational companies and become core to the country’s economic growth in future.

One of the powerful leaders in the entrepreneurial world by the virtue of its hi-tech achievements over the years, Israel has 95 companies listed on the Nasdaq stock exchange, next only to the US & China. With Tel Aviv as the centre of attraction, Israel’s startup per capita stands at the largest worldwide.

Speaking about the country’s development, Archi Dasgupta, Disruptive Tech Analyst, GlobalData, says: “The nation is often blamed for building startups without defined direction leading to many failures. Close to 1,000 startups across industries are estimated to emerge in the country each year where the majority of them end up with little success. Hence the burning question – Can Israel change its identity from a startup nation to a scale-up nation?”

GlobalData’s Disruptor Database reveals some interesting changes in the innovative journey of Israel’s hi-tech ecosystem like the number of startup exits to M&A has fallen by 16 percent to just over 50 during 2015-2018. It also says that the number of $10m-$20m venture capital funding rounds in startups (generally considered scale up rounds indicating a maturing ecosystem) recorded a growth of 18 percent in 2018 compared to 2015, and amount raised increased by 20 percent.

“Devising promising strategies from now will be crucial for the country in achieving the scale-up status. For instance, Israeli startups considering partnerships with multinational companies (MNCs) can be a great start to get help in the countries looking for expansion. Currently, there are more than 250 MNCs, including big names such as Google, Apple and Facebook, in Israel,” adds Dasgupta.

While Israeli entrepreneurs are ambitious to build up their companies on the home ground, investors are confident with betting their money on growing Israeli startups, according to current trends. As the ecosystem continues to grow, Israel will celebrate a scale-up status as well as continuing to be the magnet for startups, which is considered value for the economy.

“Beneath the seamless potential, however, are some challenges to the nation’s hi-tech industry. The major one comes in the form of talent crunch as the demand is double the number of skilled workers. Quick actions to widen the pool of skilled personnel, such as launching coding boot camps to expedite trained workers to the market and recruiting talent from overseas, can help Israel sustain the growth and achieve the status of a scale-up nation,” says Dasgupta.

A data analytics & media company that was established in 1999, and has been listed on the London Stock Exchange since 2000, GlobalData is one of the world’s largest companies, thanks to its unique data, expert analysis and innovative solutions. It’s Disruptor Database decodes emerging tech-enabled opportunities with must-have information on promising start-ups, technology led innovations, latest sector trends, consumer insights, and venture capital portfolio investments.

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