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Startups in Israel - statistics & facts

Startups are business ventures in their early operations. In general, these companies try to approach the market with their new products or services with an innovative angle. In most cases, the initial funding of start-ups are banked rolled by their founders. In order to guarantee the success and growth of a start-up, outside funding is crucial and is often provided by venture capitalists.
While the initial investment phase is critical in the funding of a start-up, the exit strategy of a venture capitalist is also of importance. The exit phase in the funding of a start-up defines the moment when the initial investor yields his gains or losses by exiting the start-up.

New business environment

The small Middle Eastern state of Israel has evolved itself in the last couple of years important international hub for startups specially in the high-tech sector. Israel has one of the highest number of startups per capita worldwide. This development was encouraged by three main factors:
The government of Israel invests a substantial amount of its innovation grants specifically on startups and technological developments.

High-tech is an important subsector if Israel’s technological startup scene. It has become a highly competitive sector which is reflected in the number of active companies working in the field.
Tel Aviv belongs to the world’s leading high-tech startups locations, gaining it the nickname Silicon Wadi (Silicon Valley in Arabic). As an effect of Israel's booming innovation and high-tech sector is, that it has become a sough after employment sector as its wages are more than double of the national average.
Israel belongs to the leading countries of R&D expenditure as share of their GDP. Which is an important factor for the development of its high-tech startup sector. A noteworthy startup sector of Israel is the Artificial intelligence technology. Israel startups belong to the leading developers of AI.


The only country in the region coming close to Israel in its innovative spirit and housing startups is the United Arab Emirates. The recent peace agreements between these two states, might open up further opportunities for cooperation in the startup sector.

The global coronavirus pandemic had a strong impact on the worldwide startup scenes. Which only intensified the existing pressure on startups worldwide which is caused by the fact that they are concentrated only in a small number of cities and a lack of inclusion. The pandemic caused further tension for startups by decreasing consumer spending and available venture capital.


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