Israel: the start-up nation on the rise

This is a literal translation of a French-Israel Chamber of Commerce’s article. You can find the original version here.

“Diverse profiles and activities, but a common trait: the will to succeed

With a higher ratio of Start-Ups per inhabitant than any other country, Israel embodies today the quintessential “Start-Up Nation”. According to American Economist George Gilder, Israeli technology has contributed to make of the Jewish State a key ally of the United States, especially in the fight against Islamic terrorism.

In 2016, a Computer Security Company (Intsights) managed to hack a conversation between terrorists on the messaging platform Telegram, who were planning attacks targeting several strategic sites.

In a similar case, the Israeli invention “Faception”, which attributes behavioral characteristics to facial expressions, has particularly raised the interest of the media for its method which sparked heated debates.

Cybersecurity is part of Israel’s expertise, as reminded by the recent Annual International CyberTech Conference 2017 held at the end of January in Tel-Aviv. By the way, one of the main companies in this field, Elbit, has won a contract with a NATO member country last month, evaluated around $US17 million.

Currently, the Jewish State counts 362 companies in the Cyber Technology industry and draws 15% of global funding of the sector, which allows the country to rank second after the USA.

Web Giants are acquiring technologies developed in the Jewish State for astronomical amounts, like the Japanese Online Services Group Rakuten, who bought the Israeli company Viber for 900 million Euros. Even more impressive, the company Waze has been sold to Google for an amount evaluated at $US 1.3 billion in 2013.

If many Israelis try to contribute to the dynamic, many French residing in Israel also took a part in the “Great Cyber Adventure” of the Jewish State. Diverse profiles and activities, but a common trait: the desire to succeed despite a path sometimes full of challenges.

Creating a company is never easy, but Israel reaches out to its entrepreneurs in order to help them realize their projects, in particular through professional events.

“For the love of Israel”

Israel and Tel-Aviv in particular offer a unique atmosphere, favorable to entrepreneurship and innovation.

“We have tried to create a daughter company of Hub-Square in Israel for two reasons” says Michael Ruben, a father and founder of a company operating on the Cloud Computing and Virtualization market.

“First, because it’s really the Start-Up Nation: There’s a real effort towards Start-Ups on behalf of governmental and local organizations. Many events offer the possibility to meet investors, customers and technological or sales partners”, he tells i24NEWS.

“The city of Tel-Aviv in particular is strategic: ultra-dynamic and human-sized, opportunities arise every week and it’s much easier to meet key decision makers than anywhere else. French institutions are, by the way, well represented, like Business France which is very active amongst French companies planning to settle in Israel and those who already did”, explains the holder of a Diploma in Economy & Finance from the Sorbonne University in Paris.

Second, because of Human Resources: the French Alyah being very strong these past years, it’s easier for French companies wishing to settle in Israel to find French-speaking collaborators with experience, expertise and a strong added value”, he adds.

“I chose Israel in 2009 because of my love for this country”, says Yoel Zirah, 26 years old and founder of Zabilo, an Israeli E-Commerce platform. “You know you’re in love when you do anything you can to make sure things work, even accepting flaws and not looking elsewhere. Zabilo has the particularity of addressing only people living in Israel. When the vast majority of Israeli Start-Ups try to sell their technologies outside the borders and attract foreign investment, we put our bets on the local market”.

Nicknamed “Amazon’s Israeli little brother” only a few months after its creation, Zabilo.com is the first multilingual marketplace in Israel, explains the marketing enthousiast.

“How not choose Israel?” asks Ilan Dahan, 24, founder of the Start-Up Car Adviser, which aims to revolutionize the buying process of new and second hand vehicles.

“Surrounding yourself well”

In order to maximize the chances of success, the creation of a Start-Up should always be supported by a professional, because entrepreneurs must be made aware of the various statutes and procedures.

“The Israeli Entrepreneur must be accompanied by his lawyer for almost all procedures, especially if he wants to create a structure equivalent to the French ‘Auto-Entrepreneur’ Legal Status”, explains Mr Ruben.

“Taxes and Employers Costs are a bit lower than in France (25% against 33.3% for the Corporate Tax, for instance) but it shouldn’t be the main factor of decision when settling your company in Israel”

The director of Car Adviser has a milder view on the matter:

“You have to choose the legal status of your company according to the activity of your Start-Up. To do so, you must find a good state accountant or a good lawyer in order to know all the rights and obligations linked to the opening of your structure”.

“We have been pleasantly surprised by the simplicity of administrative procedures. By surrounding yourself well and taking advice from professionals, there are no hurdles”, ensure Liora Bibas, founder of the French Online Library Bibooks.

“Foreign investments or remaining independent?”

According to a report published by Israel Venture Capital (IVC), more than 300 companies have benefitted from the most active Risk Capital funds in the country in 2015. Few escape the rule.

“In the frame of a fundraising, we relied on French and Israeli investors who, for the most part, are active by positioning themselves as technological advisors or sales partners”, said Mr Ruben.

“Yes, an import company needs consequent investments. Buying the inventory, customs and import fees, the creation of a website and its maintenance, as well as administrative costs represent an important financial investment”, Liora Bibas notes.

Promoted as an Eldorado for new technologies in a country where the economy flourishes and the unemployment rate fell at 5.3%, “the strength of this little country is that it crawls with young entrepreneurs, very ambitious, with ideas that revolutionize daily life and make global technology advance”, underlines Ilan Dahan.

Opened in 2016, the TAL Business School, based in Tel-Aviv, inspired by the French model of “Grandes-Ecoles”, organized on the 26 of January its first event called “Pimp my Start-Up”, which gathers a jury of professionals and investors around Start-Up projects.

An original initiative, entirely in French, in order to open the doors wider to French speakers, while sticking to the Israeli spirit: the one where anyone can present his ideas and realize his dreams.

According to the website of the French Fellowship of the University of Tel-Aviv, the latter ranks 8th on the list of the 10 biggest universities in the world for graduates having founded “Unicorns”, companies valorized above a billion USD, Forbes magazine reported.

One thing is certain: the world of Start-Ups in Israel still has great days to come.

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Interested in doing business in this country ?
We organise a learning expedition there in October. Clique here to ask for more information.
Tel Aviv Design-5

By Michael Assous

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