June 29, 2023

Excellent teamwork helped Tel-Aviv startup ecosystem reach world top-5 with 235 bn USD total value

There are 57 unicorns (startups which market value is more than 1 billion USD) in Tel Aviv –only Silicon Valley and New York show better results.

Tel Aviv became the 5-th city in the world as a center for business, startups and high-tech. Tel Aviv has overtaken Paris, Berlin, Tokyo, Beijing.

CDP analyzed what Tel-Aviv does to promote its startups and to win the global race.

During 2022 seed investments in Tel Aviv grew by 10%, the ecosystem saw two $1 billion+ exits, including AI-based Fintech Pagaya’s $8.5 billion IPO. And during pandemic the number of unicorns increased from 33 to 57.

Key parameters of Startup Ecosystems, Startup Genome, 2023

Based on the results of the CDP analysis, we can say that the secrets of successful and stable growth of the innovative economy of Tel Aviv are team success, strategic view and well chosen priorities.

All programs are aimed not only at providing conditions for business, but are focused on stimulating the active growth of companies and cooperation with each other in the most promising high-tech and innovative areas.

The ecosystem aims to develop hi-tech and innovation technologies. Among the key achievements of the city are the 2nd place in cleantech startup ranking, the 4th in fintech ranking.

The city and state government stimulate hi-tech companies and R&D, especially in the edge technologies, for example life sciences. In 2022 there was launched a five-year plan that includes investing $127 million in advancing bioconvergence. $870 million plan was introduced in 2022 to boost Cleantech innovation.

Additionally, in 2022 Israel introduced new national plan for developing human capital in high-tech. The newly elaborated Back to Tech Incentive aims to attract technology professionals living abroad.

The ecosystem is building long-lasting support for IT and AI. The essential part of support is annual Future of AI forum, bringing together startups and big tech companies in AI. Such events support the companies even on early stages, help them share their experience and give opportunities to get acquainted with world famous experts, investors and global companies (such as IBM and etc.).

Tel-Aviv and Israel developed long-lasting programs to support new enterprises. For example a comprehensive program to support research and development (up to 50% of R&D expenses are co-financed), equipment certification, and product entry into new markets works since early 1990-s. As a result, Israel has the most startups per citizen in the whole world. According to Startup Genome data, in the past decade more than 2 thousand startups, 3 thousand SME and high-tech companies were created. The country became home for more than 300 R&D centers. Tel Aviv University is ranked #8 globally for the number of VC-backed entrepreneurs among alumni.

Israel offers rather interesting opportunities to investors, for example reduced company tax rate and investment grants. Also R&D centers and large enterprises can apply for 4-years employment grants, covering up to 25% of the employer's cost of salaries for new workers.

Excellent trade-economic relations with the USA, Europe and China allow Tel Aviv to build a strong investment policy. And Mediterranean climate attracts qualified workers from all over the world.

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