If there’s one place in the world that’s strongly resembles Silicon Valley, it’s must be the area around Tel Aviv. This September, a delegation of 70 Belgian startups and corporates discovered the assets of ‘Silicon Wadi’ during a large-scale mission organized by the City of Antwerp, Startups.be, Flanders Cleantech Association and i-Cleantech Vlaanderen.
You just have to look at the numbers to realize that Tel Aviv is one of the undisputable startup hotspots in the world. In 2016, 104 tech exits in the area accounted for a staggering $10 billion. 2017 saw the biggest Israeli tech exit ever, with automotive specialist Mobileye being sold to Intel for $15 billion.
In ten years’ time, almost 7.000 startups were created in and around Tel Aviv, supported by over 60 (often state sponsored) incubators and accelerators, 9 universities and hundreds of VC’s, funds, business angels and experienced entrepreneurs.
300 tech multinationals including HP, Intel, Apple and IBM have a large R&D center in ‘Silicon Wadi’. On its own, the high-tech industry is responsible for 12.5 percent of GDP. That's really crazy for such a small country.
It's hard to identify one reason that explains why the tech sector and the startup scene are doing so well in Israel, different elements have to be taken into account.
Obviously, the ties with Silicon Valley are very strong, and Jews are known to be born entrepreneurs. Another reason is that local start-ups immediately look towards the US, Europe and Asia, as their own market is virtually nonexistent.
"The most significant element is the role of the military"
After the collapse of the Soviet Union in the 90's, many Russian and Eastern European Jews also moved to their ‘promised land’ in the Middle East. Those people had often enjoyed a very good engineering education.
But the most significant element is the role of the military. The Israeli army is very committed to technological innovation, and many tech companies arise around the armed forces (cybersecurity being the stronghold in the local tech ecosystem).
"Israeli are entrusted with heavy responsibilities during their (mandatory) military service", explains Emmanual Grinspan, a Belgian that moved to Israel and is now CEO of the digital agency E-nnovative Minds. "Moreover, they are trained in perseverance and improvisation. Those are qualities that usually fit the entrepreneurial mentality. "
Grinspan spoke to a delegation of 70 Belgian startups and corporates on the first evening of a multi-track September-mission to Israel, organized by the City of Antwerp, Startups.be, Flanders Cleantech Association and i-Cleantech Vlaanderen.
The mission focused - amongst other things such as foodtech and health - on two important growth sectors for Antwerp: digital innovation and cleantech. It took place simultaneously with the prestigious DLD Festival in Tel Aviv.
“The aim of the visit was to create partnerships between Antwerp- and Israeli-based companies in sectors as internet of thing (IoT), health and cleantech”, says alderwoman in economy Caroline Bastiaens (CD&V), “as it was to encourage Israeli investors to invest in Antwerp and to support mutual exchanges.”
Now that we’re talking investors: six Belgian start-ups (Hilbert Paradox, T-Mining, Rombit, Forganiser, MySmartBottle and Hoplr) got to pitch for two renowned Israeli venture capitalists (Viola and 83North) during the mission. They performed quite well, as two of them (Hilbert Paradox and T-Mining) got an invitation for a more ‘extensive’ meeting afterwards.
The city of Antwerp also organized a pitch session for Israeli startups during the DLD Festival. No less than 63 Israeli start-ups applied to come and pitch their enterprise in front of a professional jury. Five strong start-ups were selected for the actual competition, that was won by ‘neurofeedback headset developer’ Best Brain.
In turn, IMEC’s John Baekelmans and Tom Braekeleers (who’s responsible for the ehealth incubator BlueHealth in Antwerp), were quite impressed by BestBrain. But at the same time, Braekeleirs also emphasized that we should be prouder of our own achievements in Belgium. “In healthcare, we haven’t much to learn from the Israeli startups. In loads of areas, we're even way ahead.”
Jorik Rombauts (Rombit) and Carine Van Hove (Flanders Cleantech Association) felt the same way. “The Hiriya Recycling Park that we visited is very impressive indeed”, acknowledges Van Hove, “but when you look at the broader cleantech-picture, Belgium most certainly has an edge over Israel. This also means that there could be interesting opportunities for our cleantech companies in the area!”
“Israeli startups are very strong in everything cybersecurity”, adds Jorik Rombauts, “because that’s a sector in which the Israeli government invests tons of money. But when you look at IoT, Antwerp has more leverage than Tel Aviv, there’s no doubt about it.”
Which brings us to the following question: isn’t Israel the ‘promised land’ after all? Well, it’s complicated. There’s tons of investments in Israeli startups, but 90 percent of that money comes from abroad, as start-ups are being bought at the speed of light by foreign tech multinationals.
“It’s very difficult for a local startup to grow into a bigger company by itself”, Harold Wiener from Terra Venture Partners told the Belgian delegation at the residence of Belgian ambassador Olivier Belle. “In Israel, the goal is to invent something, and then sell it.”
"Israeli make more noise than any other people in the world"
“Being the best pilot country in the world, Israel remains a true startup nation”, stressed Wiener, “but we also need to grow our young tech companies, and for that to happen, we need more investments from European and American partners and VC’s. We should get rid of the prevalent ‘act fast, sell fast’ formula.”
“Israeli make more noise than any other people in the world, and we do business in a very direct manner”, legendary Israeli tech entrepreneur Yossi Vardi admitted during the DLD Festival, “European startups can learn a lot from that attitude.”
“But we also need your help, as our startups need the European markets to be able to grow into healthy and livable companies. That’s why it’s very important to have your Belgian delegation visiting us, and strengthening the ties between our two countries.”
Wanna know what our startups got out of the mission? Read their reactions here!