Israel: The Unicorn Nation

  • Population: Israel is the 3rd country in the world with the highest rate of university education per capita (equivalent to 50% of the population). Israel has also world-class educational institutions, has contributed to the formation of 12 Nobel Prizes, and is ranked #13 on the global innovation index by Cornell University, INSEAD and WIPO.
  • Leverage technology to maximize its natural resources: The Dead Sea contains rich mineral deposits, and they have large phosphate reserves in the Negev desert. Israel uses its technological expertise and innovation in industrial processes by maximizing the value of sophisticated chemicals, such as fertilizers and pesticides, petrochemicals, and plastics.
  • Geopolitical conflicts: Israel was declared a state in 1948, over the years it has faced various conflicts with the countries that surround it (Egypt, Jordan, Syria and Lebanon). Israel fought a war against its Arab neighbors between 1967 and 1973, preceded by peace treaties with Egypt in 1979 and Jordan in 1994. This threat has caused it to invest 5% of GDP in military spending (6th country globally), directing its efforts into technological development and innovation.
  • Entrepreneurial culture: Due to their survival instinct, Israelis seek to transcend and are taught to solve problems from an early age. This, together with the limited potential for economic growth within their country due to the small territory and population size, has created an entrepreneurial culture within the country and a global vision that encourages them to grow their startups in other geographies through innovation. For this reason, Israel is characterized for having serial entrepreneurs, technology clusters and quality startups, with 1 startup created for every 1,400 inhabitants; and it is estimated that more than 10,800 high-tech startups have been founded.
  • High cooperation between institutions: All institutions in Israel have among their objectives to promote entrepreneurship, innovation, and technological development. As a sample we have that there are at least 24 incubators, 35 entrepreneurial centers and 62 innovation hubs in the country. For context, top Israeli universities, such as Weizmann Institute of Science, Tel Aviv University, Hebrew University of Jerusalem, Technion Israel Institute of Technology, and Ben Gurion University of Negev, are among the top 500 universities in the world.
  • Smart capital: The dynamics of the Venture Capital ecosystem in Israel has managed to attract more than 2,300 investors, of which there are more than 300 Venture Capital funds. On the corporate side, there are more than 130 CVCs globally investing in startups in Israel, in the period 2015–2019 these investors participated in 34% of the transactions and contributed 45% of the capital invested in Israel. Venture Capital’s investment reached USD$10.2bn in 2020 with 600 transactions.
  • Strong presence of multinationals: Multinational companies in search of innovation and development have a presence in Israel, there are more than 370 active research and development centers by multinationals. In 2019, investment by multinational corporations was USD$2.7bn.
  • Government support: Government participation has been important in the creation of the Venture Capital ecosystem in Israel. Some of the most relevant entities are the Israel Innovation Authority (IIA), with 18 incubators funded by the government; Israel Advanced Technology Industries (IATI) and Startup Nation Central, in charge of connecting the ecosystem. In the same way, the Israel Foreign Trade Administration and the Economic and Trade Offices at the global level are fundamental to connect innovation in Israel with the rest of the world.

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ACV

ACV

ACV is an international Corporate Venture Capital (CVC) fund investing globally in Startups & VC funds.