Beginning in the 1990s, the Jewish state began producing small, innovative companies in the high-tech sector—many of which became wildly successful—earning the title, coined by Saul Singer and Dan Senor, of the “start-up nation.” But the new challenge facing the country, in the view of many economists, is allowing these small players to grow into big ones. Simon Griver argues that, even as the creation of new businesses has slowed, this process is already underway:
In 2018, . . . five Israeli tech companies completed financing rounds of more than $100 million and an additional thirteen companies raised more than $50 million. In 2019, seventeen Israeli tech companies completed financing rounds of more than $100 million and an additional fifteen companies completed financing rounds of more than $50 million. In 2020 so far, despite the COVID-19 crisis, seventeen companies have completed financing rounds of more than $100 million and eighteen companies have completed financing rounds of more than $50 million.
Most of the companies raising more than $100 million in a financing round have hundreds of employees and offices around the world and it is probably no longer appropriate to call them start-ups. . . . So it’s looking like the start-up nation is developing into scale-up nation. [Meanwhile], the number of start-ups in recent years has been decreasing. According to Israel’s Central Bureau of Statistics there were 4,363 early-stage start-ups in Israel in 2018, down 6 percent from 2017, and the number has since probably declined.
That is still a very large number and the Central Bureau of Statistics speculates that it might well be that the fall in [the number of] early-stage start-ups is actually a very positive thing. The Israeli ecosystem has matured since the early 1990s and the hit-and-miss nature of venture capital back then has been replaced by a more seasoned judgment by investors of whether an enterprise is likely to succeed. So only the fittest start-ups are likely to find the investment to get them up and running.
Read more on Globes: https://en.globes.co.il/en/article-israel-transforms-into-scaleup-nation-1001351180