It’s been a few years now since the fear mongering crowd began to declare that Israel is becoming a dictatorship and that the economy will crash.
You know, it started with the judicial reform, continued with COVID, and then those voices became even stronger during the war.
You’ve heard the voices.
“Everyone is leaving Israel.”
“Israeli tech is over!”
“The economy can’t survive this!”
“I’m outta here!”
Here’s the thing with those people. They’re right and they’re wrong.
They’re right that given the complexities of all three of those things, the judicial reform, COVID, and this war, that most, almost all countries would buckle and the economy would crash.
These people, however, forgot one thing. We are not like most countries. We are not like most nations. We defy logic.
This isn’t a new phenomenon. It dates all the way back to ancient Egypt.
The Torah explicitly says that the more the Egyptians persecuted and tortured the Israelites, the more the Israelites reproduced and flourished.
Most people would buckle when persecuted and tortured, but not the Jews.
So what does this mean for the economy and for Israeli tech?
Well, the data is out and sure enough, we’re breaking records yet again. They are attacking and destroying, we are building and innovating.
In 2024, we broke all records of M&A deals, mergers and acquisitions in Israel. $10.5 billion of M&A , a huge increase since our previous peak.
“This year too, Israel’s technology industry presented record figures for mergers and acquisitions. According to a new report from Vintage Investment Partners, M&A deals set a new peak this year of $10.5 billion, 22% higher than the previous peak of $8.6 billion in 2021.”
Pretty nuts, right?
What about investments? After all, investors look for stability and the Middle East has been anything but stable this past year. So investments must be all the way down, right? Wrong!
This morning, Reuters reported that Israeli startup fundraising was up 31% in 2024, led by established firms. $12 billion in 2024.
By the way, it’s worth mentioning how small we are. Israel, as you may or may not know, is a country smaller than New Jersey, which makes Israel’s success in the world of innovation even more extraordinary.
Now, don’t get me wrong. No matter how you slice it, it’s been a challenging year for multiple reasons, but the Jewish people are resilient and when we need to work twice as hard, we step up.
This war wasn’t the only thing working against Israeli tech this year. Besides the fact that investors might have been more conservative when investing in Israel, let’s not forget that half the country was called up for reserves.
You won’t find a single tech company that didn’t have at least part of its team drafted. In many instances, the founders were called up. That can easily make a company come crashing down.
On top of that, let’s not forget that Israel is more isolated than it’s been in years. I don’t mean politically or diplomatically. I mean, physically isolated.
Almost all airlines stopped flying to and from Israel. For an Israeli tech company that might have its R&D in Israel but its sales and marketing outside of Israel, not being able to jump on a plane is a real challenge and barrier to success.
Add to that the fact that for the past year and half, millions of Israelis are running to the bomb shelter multiple times a day. That is also not conducive to building a company.
In other words, we had everything working against us in 2024.
Despite all of those challenges, Israel has indeed stepped up.
The challenges that lie ahead for the Israeli tech ecosystem are many.
Traditionally, Israeli entrepreneurs sell too early. Many have said, for example, that if Waze had not accepted the billion dollar check from Google, they could have built a much larger company.
While that was most definitely the case for many years, I think we’ve seen a shift in the past few years. If you speak to most Israeli entrepreneurs, you’ll hear about their ambitions to build unicorns, or billion dollar companies.
You’ll hear about their goal of eventually going public and building a multi billion dollar global company.
For now, while there are definitely some huge Israeli tech companies such as Wix or Check Point, Israel has yet to build a company at the scale of a Google or a Meta.
That is definitely Israel’s next challenge. For now, Israeli entrepreneurs will continue to step up and work hard as we fight this existential war.
To all those fear mongers, I say, you underestimated the Jewish people. Never bet against the Jews!
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