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As elsewhere in the world, Israel’s high-tech industry has begun to slow down somewhat, especially compared to the rapid growth of the past few years. This is reflected in a decline in new hires, layoffs and even the closing of some small firms.
For example, the Israeli-based company Reilly, which developed a platform for finding real estate, announced last August that it would cease operations. The company laid off eight employees in Israel and another 130 American workers. This happened after the company raised $100 million last year, including a major investment from football legend Joe Montana. Reilly CEO Tyler Baldwin said the company is closing due to global economic conditions and the resulting slowdown in the overall real estate market. Difficulty in Fundraising.
However, despite this downward trend, investments in Israeli high-tech companies have not stopped. A few Israeli unicorns and startups have managed to raise hundreds of millions of dollars in the past few weeks, proving that the global slowdown is only temporary and that the future still lies in high-tech, diverse sectors.
For example, DriveNets, an Israeli company that builds communication networks on the cloud, raised $262 million at the end of August. This brought the total amount raised by the company to $587 million, and the company’s valuation is now over $2 billion.
DriveNets was founded in 2010. It was founded in 2015 by two high-tech entrepreneurs, Ido Susan and Hillel Kobrinsky. Susan previously founded Intucell, a company that allows mobile operators to independently use radio access networks. The company was bought by Cisco in 2013 for $475 million. Kobrinsky founded Interwise, a specialist in online conference calls. Sold to AT&T for $121 million.
The current round of funding comes after a very successful year in which the company continued to grow, expand into new markets and increase its workforce by 50% in Israel and around 450 employees worldwide. The company has signed important contracts with the biggest communication companies in the world. It is currently in various stages of getting those companies to incorporate the solutions it offers.
Another company that recently received significant capital is HiBob. It raised $150 million in a new round of funding in August, so its valuation is now $2.45 billion. This comes 10 months after he got the same amount in the previous round. The company has developed an innovative human resource management platform called “BOB” that is currently used by more than 2,500 companies with hundreds of thousands of employees.
HiBob has doubled its size since 2021, with 370 new hires. The company has expanded operations in the United States, Canada, Australia, England, Germany, Sweden, Denmark, the Netherlands, Spain and Eastern Europe. It also continues to expand its operations in Israel and is hiring engineers, support staff and digital marketers, as well as people in finance and information management.
Founder and CEO Roni Zahavi offers a more optimistic outlook on the high-tech employment market in Israel and around the world. “Based on the activity of the company’s clients on the ‘Bob’ platform, it appears that hiring and firing are still going on. They (our clients) are hiring more workers than they are cutting. While these are not the same growth rates we saw in 2021, there is no doubt that we are seeing a positive balance in favor of new hires and growth. “We expect most companies to hire more in the next few quarters because growth is not possible now without the right people,” Zahavi told the Israeli press.
This investment wave that came in August also included cyber fund Cyberstarts. It raised $60 million for a new seed fund. This is the third fund created by company founder Gilly Raanan, who raised the money shortly after his “New Opportunities” fund raised $200 million. This brings Cyberstarts’ total assets under management to $374 million. According to the fund’s management, the companies in the portfolio have raised a total of $20 billion and $2 billion by 2021.
AccessiBe is not that far off. It recently raised $30 billion. Founded in 2018, AccessiBe develops various technologies to make websites accessible to people with disabilities. After rapid growth over the past year, it now employs 140 people in its offices in Tel Aviv and New York.
Another of Israel’s unicorns is the expanding Bigpanda. Most recently, it raised $15 million in January, in addition to funding from UBS and Wells Fargo. The company helps large organizations minimize disruption to their IT services with a crisis management system. So far, it has raised $310 million after raising $190 million for a $1.2 billion valuation. The additional funding was raised at the same rate. Bigpanda is based in Tel Aviv and has offices in the United States and London. It employs 350 people, including 115 in Israel.
On August 23, the startup announced that it had raised $16 million. The company has developed a platform to solve one of the most pressing problems faced by developers every day: the ability to understand the behavior of the code they’re working on when it’s running live in remote environments. Dozens of Fortune 500 companies have adopted the platform, including Amdocs, Yelp, Autodesk, Santander Bank, Dynatrax and Cisco.
The company has grown from 40 employees at the beginning of the year to 60 – 52 of them are employed in Israel and the rest in the United States. Moreover, he announced that the new funding will be used to hire more employees, increase marketing and help developers accelerate new products.
Long, the above list is partial and does not include all investments in Israeli startups and high-tech funds. Thus, it offers hope for the entire Israeli high-tech industry. As Jule Ventures LLC co-founder and partner Daniel Frankenstein put it in a recent PRO note to Al-Monitor, these large investments may indicate that the global slowdown affecting Israeli high-tech may be temporary or “overblown.” “The Israeli tech ecosystem generally follows global trends, seeing a drop in the number of deals, investment dollars, M&A transactions and IPOs.” However, he said, “these downward trends may be overestimated in places such as Israel that have seen little growth.”
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