TEL AVIV TECH | ECOSYSTEM REPORT

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%

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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

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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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