While the rest of the economy took a hit during COVID-19, the start-up tech sector thrived and sometimes benefited.
The original article was published by Alon Ghelber, CMO at Revuze on Jpost
The COVID-19 pandemic has been disastrous for virtually every part of the economy in most countries around the world. Even if we champion Israel’s quick response at the beginning of the pandemic and our early vaccination campaign in 2021, the Past year and a half have been extremely challenging on most fronts.
There is one sector of the Israeli economy that, while deeply affected by the pandemic, has managed to shine throughout – our tech sector, which was largely not disrupted by the pandemic and, in some cases, benefited from some of its “silver linings.”
At the moment, Israel’s economy is on track for a good recovery; it is projected to grow by more than 5% in 2021, thanks to exports, consumer spending and investments. How did the Israeli start-up ecosystem evolve during the pandemic? I spoke with several industry insiders to see how the pandemic affected their sector.
The greatest indicator that the tech industry in Israel has not been in distress over the last year and a half is the record-breaking number of unicorns, a number that is already impressive and is in continued growth. (“Unicorn” is the term used to describe a private start-up company with a value of over $1 billion.)While the number of Israeli unicorns was only one in 2013, today there are over 65 unicorns – over 8% of the world’s total number of unicorns!
According to Keren Levy, chief operating officer at Payoneer, which had a $3.3 billion valuation earlier this year, there is a “virtuous cycle of economic interests.” As more global actors see the success of many Israeli-born start-ups, they feel more encouraged to invest money in new Israeli ventures, facilitating a constant flow of cash.
Many of the start-ups operating in Israel offer cloud-based software solutions, which don’t require infrastructure and can be easily discovered and acquired from abroad. During the COVID-19 pandemic, as a significant portion of our economy had to transition online and work and school, for many people, became remote, cloud-based solutions quickly became very relevant.
Gadi Mazor, chief operating officer and general manager at BioCatch, a behavioral biometrics firm based in Tel Aviv, told me that, for the most part, the pandemic expedited many digital trends. “Many remote businesses and new ways of doing things grew out of the crisis,” he explained. “The technology segment as a whole got a major boost. Processes that in normal times would have taken years, were completed in months, giving the companies involved in them unprecedented opportunities.”
Cryptocurrency in finance and tele-health in health care are just two examples of this phenomenon.
Work from home
While working from home was not uncommon in the tech industry before the pandemic, it has definitely become much more mainstream and accepted since the first lockdown in 2020. Many start-ups are still maintaining at least part-time work-from-home policies, even now that the majority of Israelis are vaccinated against COVID-19.Ido Susan, co-founder and CEO of DriveNets, a telecommunications unicorn company based in Ra’anana, told me that for most companies the transition to remote working was smooth and easy. Companies quickly provided their employees with the equipment they needed to work from home and they managed to continue to recruit talent and hire new employees, even remotely.“
Many Israeli companies took the pandemic as an opportunity to become more efficient, in some cases repositioning themselves and in others capitalizing on the weaknesses of their competitors,” Boaz Grinvald, who is the CEO of Revuze, told me.
It’s easy to say that with every challenge comes new opportunities, but in our ecosystem, this saying rings particularly true. The pandemic has been devastating, but the tech scene is stronger than ever before, and this is a great time for many companies to shine on the global stage.
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