TEL AVIV TECH | ECOSYSTEM REPORT
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TEL AVIV TECH ECOSYSTEM REPORT 2023
Photo: Ilan Spira
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Produced by Tel Aviv Global & Tourism, 2024 Data by IVC Research Center & dealroom Graphic Design by Studio Touch Cover Photo: Piotr Musioł | Mayor's Photo: Guy Yechiely
Dear Tech Community, I am proud to present the 2023 Tel Aviv Tech Ecosystem Report.
Tel Aviv has earned its place at the heart of the startup nation thanks to an exceptional density of entrepreneurs, startups, investors, accelerators, and academic institutions. All of this is possible only in a city that enjoys freedom, democracy, pluralism, and diversity - the founding values of our city. In 2023, the Tel Aviv tech community has been among the most prominent and persistent defenders of these values. The attacks of October 7th, shook the very foundation of the State of Israel. Since that day the tech community has stepped into an indispensable role in the national response, from operational and urgent rescue operations to longer term recovery and repair. Both the local companies and the multinational companies, joined the military campaign and the civil eɬort and established support and aid systems, mobilization and contribution. Among other things, they also worked to help the thousands of residents of the surrounding area and the north who found refuge in Tel Aviv. Through it all with 20% of their workforce called into active military service, Israeli tech companies continue to demonstrate what their investors have long believed: Israeli tech delivers no matter what. Tel Aviv Tech is the municipal taskforce charged with supporting the local tech ecosystem as an engine of innovation and opportunity. The cross-functional initiative will continue to create connections between the industry and the city that enable both to ɮourish, and create powerful synergy both at home and abroad. Just this year, 12 multinational companies opened R&D centers in Tel Aviv, joining the 164 centers from 19 countries already operating. I invite you to explore the following report with full conɭdence that the values and strengths described here are fully reɮected on every page. The unwavering commitment and relentless creativity of the Tech community have made Tel Aviv an innovation hub around the world, but also at home. The commitment to excellence and progress inspires and encourages local leadership at every turn. We at the Tel Aviv Municipality are committed to doing our part to create and maintain the necessary conditions for the tech community to continue doing what it does best, undoubtedly contributing to our resilience, growth, and a brighter future for all. Best regards, Ron Huldai Mayor of Tel Aviv-Yafo
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Dear Tech Community, 2023 was a tumultuous year for the State of Israel, including the local high tech industry. In this year we witnessed a brutal terrorist attack, which sparked a war that continues to this day across multiple fronts. During this challenging time, I am proud to say that the tech industry has once again proven its strength, resilience, and importance to Israeli society. The tech companies and their employees
have skillfully used the tools that characterize their work environment in both the civilian and military arenas to demonstrate resourcefulness, ɮexibility, adaptability, and rapid response. These characteristics have been particularly evident since October - on international advocacy, establishment and operation of command centers, and the collection of donations and resources. All this despite the high proportion of workers who were recruited into reserve duty and while continuing to provide impeccable service to their customers and partners around the world. As you can see in this report Tel Aviv have created a record-breaking 155,000 jobs this year, both in Israel and around the world. Tel Aviv ranks ɭrst worldwide in converting startup companies into unicorns, and ranks ɭfth among global ecosystems in Startup Genome's annual report that measures the attractiveness of the industry. This data establishes Tel Aviv's international status as a major hub for innovation and a magnet for a diverse range variety of companies from diɬerent countries. Despite the global decline in venture capital investments in 2023, Tel Aviv companies raised a total of $4.8 billion in 342 rounds, including 10 Tel Avivian companies that raised mega rounds of over $100 million. This is an indication of the conɭdence and value attributed to local companies by global industry leaders. This trust drives innovation and fuels the technological developments created in the city. Despite the challenges facing Israel, the resilience of the industry, even in these times, is a source of optimism and hope. The Tel Aviv tech industry continues to stand strong serving as a beacon of innovation and creativity among global cities, and oɬering a wealth of investment opportunities. I am conɭdent that the wonderful people in this industry, as well as the technologies and inventions developed now, will oɬer solutions to the challenges of tomorrow. Yael Andorn Chairman of the Board Tel Aviv Global & Tourism
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Dear Partners, The annual Tel Aviv tech report tells the story of the Tel Aviv tech ecosystem and illustrates, even during this challenging period, the strength and signiɭcance of the industry within our city. And yet, despite the achievements outlined in these pages, we simply cannot take our success for granted. Technology is advancing at a rapid pace,
and the competition for talent and capital is only getting stronger. The tech ecosystem constitutes a signiɭcant economic growth engine for the state, the city, and its residents, and creates the social and civic resilience that are indispensable. Now more than ever, the Tel Aviv Municipality has made active support of this critical growth infrastructure a top priority. ‘Tel Aviv Tech’ is an economic development unit of the Tel Aviv Municipality, operated by Tel Aviv Global and Tourism, focused on providing comprehensive support to the local tech ecosystem, strengthening the city through global connectivity, and creating collaborative opportunities for improving the quality of life for all Tel Aviv residents. The team works directly with various stakeholders - from homegrown startups to mega multinationals that have chosen to operate from Tel Aviv, as well as investors, international partners, and municipal agencies and decision-makers to ensure that Tel Aviv provides best-in-class services and resources for growing companies, and together maintaining Tel Aviv as a world-leading hub of innovation. I am proud to present this report to you now – a window into the power and fortitude of the Tel Aviv tech community, the tremendous scale of its global contribution, and a vote of conɭdence in its continued success.
Sincerely yours, Sharon Landes-Fischer CEO, Tel Aviv Global & Tourism
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FORWARD MOMENTUM IN THE NONSTOP CITY
Mobility Launch of the light rail red line running through Tel Aviv’s central business and tech district.
Democracy Dedication of the main hub of Tel Aviv’s business and tech district to honor the values, conviction, and eɬort that make innovation possible.
Photo: Kɭr Sivan
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Education Launch of the Tel Aviv Center for HiTech Careers - an educational center for high school students to learn about cybertech, robotics, data science, and more. Dedicated by the Tel Aviv Foundation and veteran Tel Aviv startup, Check Point, the center is a giant stride towards the resilience and opportunity of tomorrow.
Space Exploration Launch of the satellite observatory for quantum optical communication at Tel Aviv University - the ɭrst in Israel; among the most advanced in the world; and a boon to the rapidly developing quantum and space tech industries in the region.
Photo: Tel Aviv University
Healthcare Innovation Launch of the the quantum computing for life sciences & healthcare center at the Tel Aviv Sourasky Medical Center, in collaboration with Classiq and Nvidia. The initiative will champion the development and implementation of quantum algorithms and applications, targeting their transformative potential on life sciences and healthcare.
Photo: Lior Zur, courtesy of Ichilov Hospital
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A BUZZING HIVE OF INNOVATION The unique density of Tel Aviv’s tech ecosystem facilitates the community and continuous exchange of ideas that power innovation.
2,731 Tel Aviv Tech Companies
11 Academic Institutions
174 Accelerators
346 Investor Oɯces
30 Coworking Spaces
164 Multinational R&D Centers
1000+ Tech Meetups
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HEART OF THE STARTUP NATION
Regional Distribution in Israel
Tel Aviv Metro Tel Aviv Rest of Israel
2,731 33%
2,347
3,299
Tech Companies
55 59%
25
13
Unicorn Companies
55% $4,788
$2,309
$1,607
Capital Raised (Millions)
$8,202 75%
$2,726
Exit Value (Millions)
164
190
150
Multinational R&D Centers
32%
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TEL AVIV IS A GLOBAL TECH POWERHOUSE
#1 Startup to Unicorn Conversion #5 Global Startup Ecosystem $437B Ecosystem Enterprise Value #5 Capital Raised per Capita
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TEL AVIV IS HOME TO NEARLY 3,000 TECH COMPANIES
Number of Tel Aviv Companies by Growth Stage
Revenue Growth Initial Revenues R&D
Seed
2,587
2,662
2,699
2,739
2,731
300
280
317
318
317
1,364
1,331
1,415
1,407
1,368
858
859
802
770
743
217
261
165
167
159
2019
2020
2021
2022
2023
Average Company Proɭles by Growth Stage
Initial Revenues
Revenue Growth
Seed
R&D
Age (Years)
2.7
5.4
8.2
10.4
Global Branches
GRAPH OR PIC
1.1
1.3
1.7
4.4
Capital Raised (Millions)
$8.3
$15.4
$2.4
$178.3
Global Employees
5
10
22
329
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A LEADER IN AI, CYBER AND FINTECH WITH DYNAMIC GROWTH IN CUTTING EDGE TECHNOLOGIES
Leading Verticals by Number of Companies 1 977 Artiɭcial Intelligence 2 416 Machine Learning 3 346 FinTech 4 253 Cyber Security 5 220 Cloud
6 215 7 172 8 140 IoT 9 136 10 126
Big Data
RetailTech
Generative AI
Gaming
Highest 1YR Growth Rate Sectors in Number of Companies
Generative AI 11%
FoodTech 5%
Quantum Technology 17%
SpaceTech 13%
LegalTech 6%
Companies may be tagged under multiple verticals
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TEL AVIV STARTUPS CONTINUE TO ACHIEVE $1 BILLION UNICORN STATUS
55 Tel Aviv Unicorns
83 Unicorns Created in 5 Years
* 28 unicorns exited or lost value
New Tel Aviv Unicorns in 2023
Enterprise Infrastructure
Artiɭcial Intelligence
Digital Media & Entertainment
Security
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#1 WORLDWIDE FOR STARTUP CONVERSION TO UNICORNS
Share of Startups That Achieve $1 Billion Valuation
2.97%
Tel Aviv
2.19%
Bay Area
1.60%
Berlin
1.46%
New York
1.26%
Boston
1.21%
Bengaluru
1.02%
Paris
0.95%
Stockholm
0.87%
Los Angeles
Mumbai
0.62%
London
0.59%
Chicago
0.55%
Singapure
0.50%
Washington Dc
0.42%
Source: telaviv.dealroom.co
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TEL AVIV COMPANIES RAISED $4.8 BILLION IN 2023
Capital Raised by Tel Aviv Companies (Millions)
# of Total Rounds
Revenue Growth Initial Revenues R&D
Seed
773
609
599
$20,730
550
342
$10,644
$8,423
$5,360
$4,789
2019
2020
2021
2022
2023
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TEL AVIV IS BEST-IN-CLASS FOR SCALING STARTUPS, AHEAD OF LEADING GLOBAL HUBS
Conversation rate of cohorts founded between 2010-2021
Tel Aviv
Bay Area
New York
London Paris
Berlin
Seed
Series A
Series B
Series C
Series D
Seed
Series A
Series B
Series C
Series D
Tel Aviv
100%
38.8%
20.9%
13.5%
7.4%
Bay Area
100%
39.4%
20.3%
10.7%
5.4%
New York
100%
36.2%
18.3%
10.7%
5.7%
London
100%
34.2%
14.4%
7.8%
4.4%
Paris
100%
27.6%
9.5%
4.4%
2.3%
Berlin
100%
38.5%
27.8%
9.7%
4.7%
Dealroom.co. Note that these are not conversion rates between rounds. Some startups also skip the (pre)seed stage and go straight to Series A. Includes companies HQ and/or founded in Greater Tel Aviv.
Source: telaviv.dealroom.co
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12 COMPANIES RAISED MEGA-ROUNDS OVER $100 MILLION
Cyber Security
Cyber Security
Generative AI
HR Tech
Medical Devices
Transportation
FinTech
Gaming
Cyber Security
Generative AI
Cyber Security
Generative AI
Highest 3YR Growth Rate in Capital Raised by Vertical
Generative AI 143%
Bots 168%
Quantum Technology 30%
AgeTech 41%
FemTech 16%
Gaming 112%
SpaceTech 22%
NLP 24%
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TEL AVIV RANKS 9TH GLOBALLY BY VENTURE CAPITAL INVESTED
VC investment in top global ecosystems, 2023
Bay Area
$55.4B
New York
$17.6B
Boston
$14.6B
London
$12.8B
Los Angeles
$8.8B
Shanghai
$6.5B
Paris
$5.6B
Bengaluru
$5.5B
Tel Aviv
$4.8B
Stockholm
$4.8B
Singapore
$4.5B
Tokyo
$4.4B
Beijing
$3.7B
San Diego
$3.6B
Seatle
$3.4B
Source: telaviv.dealroom.co
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TEL AVIV IS A WORLD LEADER IN CRITICAL AND RAPIDLY GROWING INDUSTRIES
#2 for Cybersecurity - VC investment
Bay Area
$1B
Tel Aviv
$1B
New York
$871M
London
$337M
Baltimore
$324M
Paris
$248M
Boston
$242M
Atlanta
$232M
#4 for Medical Devices - VC investment
Bay Area
$2B
Boston
$511M
Minneapolis
$425M
Tel Aviv
$334M
New York
$286M
Paris
$258M
Los Angeles
$225M
Cambridge
$224M
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#4 for Generative AI - VC investment
$19B
Bay Area
$1B
New York
$906M
Paris
$304M
Tel Aviv
$296M
London
$278M
Toronto
$273M
Philadelphia
$260M
Beijing
#4 for Autonomous tech - VC investment
Pittsburgh
$1B
Bay Area $671M Birmingham $528M Tel Aviv $276M Los Angeles $247M Toronto $221M Shenzhen $216M Shanghai $216M
Source: telaviv.dealroom.co
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Photo: Yoav Aziz on Unsplash
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SPOTLIGHT ON GENERATIVE AI IN TEL AVIV
136 Generative AI Companies
$1B Raised in 2 023
2020 2021 2022
65 Active inve stors In 2023
143% 3YR Growth of Capital Raised
Leading Generative AI Sub-Sectors by Share of Companies
Digital Media & Entertainment 3.4%
Miscellaneous Software 19.5%
Data & Analytics 4.2% Consumer-Oriented Software 5.9%
Design & Development Tools
18.6%
Digital Health 6.8%
Enterprise Applications 8.5%
Security 16.9%
Industrial Technologies 16.2%
Most Active Investors
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FOREIGN INVESTMENT IN TEL AVIV TECH REMAINS STRONG DESPITE A GLOBAL SLOWDOWN
Share of Foreign and Local Investors in Tel Aviv Companies
69% Foreign Investors
31% Local Investor s
Leading Investor Countries
Sweden
Russia
Canada
Luxembourg The Netherlands
United Kingdom
Germany
France
Switzerland
Japan
United States
Portugal
Italy
China
Spain Malta
Israel
South Korea
Vietnam
Hong Kong
United Arab Emirates
India
Taiwan
Thailand
Singapore
Australia
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Growth in Number of VC Investors
313
293
252
200
152
2019
2020
2021
2022
2023
2023 Investors by Type
Others 4%
Venture Capital 58%
Corporate VC 2%
Angel Club 6%
Private Equity 8%
Investment Company 22%
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GLOBAL BUSINESS LEADERS AND MULTINATIONALS FIND VALUE AND OPPORTUNITY IN TEL AVIV TECH
164 R&D Centers
168 Investor Offices
29 Accelerators & Incubators
21 Others
Growth in Number of Multinational R&D Centers
164
156
143
121
109
2019
2020
2021
2022
2023
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Leading Countries with Multinational Presence in Tel Aviv
"Israel is one of NVIDIA's largest hubs in terms of population ratio. It's also home to some of our most talented engineers, and some of our most significant investments originated from Israel. We will continue to invest heavily in Israel and support our employees fully, regardless of their background."
Jensen Huang, Founder and CEO, NVIDIA, NVIDIA GTC, 03.24
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MULTINATIONAL R&D CENTERS IN TEL AVIV
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THE SKILL, DRIVE, AND CREATIVITY OF TEL AVIV'S TECH TALENT POWER GLOBAL INNOVATION
155,460 Global Employees of Tel Aviv Companies
"17% of our Employees in Israel are on reserve duty today. They have not missed a single commitment despite the conflict... That's why we believe so deeply in them - Israelis are the most resilient people on earth."
20,544 Multinational Employees in Tel Aviv
Patrick Gelsinger, Intel CEO, Fox Business, 12.23
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SUCCESS BREEDS SUCCESS: TEL AVIV COMPANIES PRODUCE THE NEXT GENERATION OF SUCCESSFUL FOUNDERS
Number of New Companies Founded by Company Alumni
10
8
8
25
12
9
9
2014
2016
2018
2020
2022
2024
Source: Accel & Dealroom.co - full report. Only includes VC-backed founder factories.
Source: telaviv.dealroom.co
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THE WORLD IS EAGER TO ADOPT TEL AVIV INNOVATION: ACQUISITIONS HAVE MORE THAN DOUBLED IN FIVE YEARS
Value and Number of Tel Aviv Exits
IPO (Millions)
Acquired (Millions)
Total # of Exits
110
68
68
62
46
$10,296
$8,968
$8,202
$4,394
$3,517
2019
2020
2021
2022
2023
32
Largest Exits in 2023
Security
Medical Devices
Security
$3,600M
$650M
$625M
Security
Security
$500M
$490M
Leading Verticals by Exit Value (Millions)
1 $6,900 2 $3,614 3 $1,717 Cloud
4 $1,126 SaaS 5 $1,102 6 $652
7 $627 8 $490 9 $402 DevOps
Cyber Security
Generative AI
Marketing Tech
Artificial Intelligence
Privacy Tech
Medical Cannabis
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METHODOLOGY
IVC 1. The data in the report is updated to February 1, 2024 .
2. Definition of Tel Aviv tech company : The headquarters of the company is located in Tel Aviv • The company manages a branch office in Tel Aviv with an HQ relocated abroad. 3. Definition of Greater Tel Aviv company : The headquarters of the company is located in one of the cities and towns near Tel Aviv • The company manages a branch office in one of the cities and towns near Tel Aviv • List of cities and towns included in Greater Tel Aviv: Azur, Bat-Yam, Bnei Brak, Ganey Tikva, Givat Savion, Givat Shmuel, Givatayim, Herzliya, Holon, Kibbutz Glil Yam, Kiryat Ono, Or Yehuda, Petach Tikva, Ramat Efal, Ramat Gan, Ramat Hasharon, Savyon-Gani Yehuda, Yehud 4. The companies included in this report are tagged as high-tech companies in the IVC database 5. Company Stage: Each Company is classified according to one of four development stages as follows:
Seed
Early stage of product development and fundraising
R&D
Improvement of the product/process/service and their adaptation to market needs
Initial Revenues
A company whose Yearly revenue does not exceed $10M
Revenue Growth
A company whose Yearly revenue exceeds $10M AND has a double-digit annual growth rate
Dealroom :
1. Definition of a Tel Aviv tech company : Companies designed to grow fast. Generally, such companies are VC-investable businesses. Only companies founded since 1990 are included in this report. 2. Definition of a Unicorn : Unicorns are (former) startups that reached US$ 1B valuation or exit at one point in time. 3. Regional Breakdown : Companies represented in this report have their HQ in the Greater Tel Aviv Area, or have relocated their HQ abroad while maintaining a branch in Greater Tel Aviv.
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ENJOY OPEN ACCESS TO THE DEALROOM - TEL AVIV TECH ECOSYSTEM DATA PLATFORM Find the newest investment figures, emerging trends, technologies and promising startups. Startup teams can claim their company profile to raise their visibility in the Tel Aviv Tech ecosystem.
telaviv.dealroom.co
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PRECISION FARM Keyword
PRECISION FARM Keyword
DECARBONIZATION Keyword
PRECISION FARM Keyword
PRECISION FARM Keyword
QUANTUM Keyword
PRECISION FARM Keyword
SUPERCOMPUTER Keyword
PRECISION FARM Keyword
Source: telaviv.dealroom.co
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Photo: Guy Yechieli
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