In 2021, the Israeli tech ecosystem forged an indelible mark on the world stage, securing an extraordinary $27 billion in venture capital investments. This remarkable achievement, as reported by Israel Innovation Authority, a government agency, not only broke previous records, but also defied prevailing trends in venture capital funding. While the past two years have seen a decline in VC funding for Israeli startups, which echoes global standards, the nation has demonstrated an unparalleled resilience and remains an undisputed choice for tech investment.
Amidst the challenges and uncertainties, Israeli companies are models of business resilience, demonstrating the ability not only to weather storms but to thrive and redefine success in the dynamic landscape of the technology sector. Gal Biran, its founder Base.ai shares, the unwavering priority of ensuring the safety and well-being of his team is critical. In collaboration with the entire team, steps were taken to ensure minimal impact to customers and the business, epitomizing a commitment to operational resilience. Despite the uncertainties, Israeli companies are emerging as role models not only for weathering the storms, but for thriving and redefining success in the dynamic technology landscape. This narrative echoes the deeper ethos that transcends business metrics—a testament to the resilience, humanity, and adaptability inherent in the Israeli tech sector.
Navigating through adversity
Israel’s booming tech sector, resilient to past crises such as the economic downturn and the Covid-19 pandemic, is facing a unique challenge due to the recent war sparked by the Hamas onslaught. The conflict, thereby ending 1,300 victims in Israel, has disrupted daily life, resulting in school closures, deserted streets in Tel Aviv, and many businesses shutting down. This time, the impact on the country’s key industry is telling, with closures attributed not only to security concerns but also to employees being called up for military service.
The war’s most immediate impact on tech companies is evident in the workforce. Israel has mobilized 300,000 military reservists to join the conflict, mostly people who were working and studying inside the country, with a few returning from abroad.
According to SNC estimates, approx 10% of the technical staff in Israel have been recruited and in some companies, this percentage has increased up to 30%. Despite the challenges of conflict, the sector remains a critical lifeline, drawing unwavering support from experienced investors committed to helping the nation rebuild.
This solidarity is evident in the response of the global tech community, with more than 500 VC funds signing a “Statement of Support” for Israeli startups, entrepreneurs and investors. Recognizing Israel’s role in the global innovation ecosystem, the statement reflects a collective commitment to stand by the country and its people.
Tech companies themselves have signaled unity, putting aside differences with the government to contribute to the war effort. From supplying vital equipment for soldiers to leveraging expertise in artificial intelligence and cyber security, the industry is demonstrating a cohesive response to convergence.
The Business Impact—Becoming Resilient Through Change
In the midst of a navigational war, the founders of technology exemplify resilience in unprecedented ways. A poignant reflection from a CEO who embodies the essence of business resilience while nurturing a thriving company. “At the end of the day, we’re here to build a thriving company. And it becomes extremely difficult at a time when every worker is affected by the horrors we’ve all experienced,” says Ittay Hayut, Co-Founder and CEO of oops.
In the face of adversity, these leaders recognize the primary role they play in providing emotional support to their employees and caring for their well-being. Their unwavering commitment is clear: to sustain success, they must prioritize the people who make it all possible – their workforce. This commitment manifests itself in tangible ways, with the CEO at oops, noting the humble instances of workers congregating. The collective strength of the workforce stands out whether it’s acts of mutual aid or the proactive attitude of the US team, which calls for more tasks to support their Israeli colleagues.
“I know we will continue to innovate and create value and change in the world as long as we remain strong – as a nation, in startups and as individuals,” he said. Gal Biranits CEO and Co-Founder Base.aia MarTech company designed to provide a defined customer marketing platform that helps B2B organizations create personalized lifecycle engagement with their customer base at scale.
Surprisingly, amid the challenges, these tech companies are experiencing an increase in output that exceeds expectations. Both Gal Biran, CEO and Co-Founder Base.ai and Ittay Hayut, the Co-Founder & CEO at oops he attributes this to the team’s resilience and determination to push forward, seeing it not just as a response to adversity but as a true triumph over terror. This narrative presents a larger theme in the technology industry, where the spirit of unity and perseverance emerges as a powerful force in the face of global challenges.
Building community and driving organizational change
Many founders are on the front lines, navigating the intersection of innovation and business resilience. Israeli founders prioritize the safety and well-being of their teams. In an interview with some Israeli tech founders, many emphasized that the second level of action – building business resilience and business continuity – is an integral part of their strategic approach.
With a global team, half of which is based outside of Israel, Gal and his team have successfully minimized the impact on both customers and business operations.
Talia Soen, its co-founder and CEO Happy things, took decisive action, embodying the transformative power of Israel’s founders. When the devastating events of October 7th unfolded, Soen quickly shifted her focus from startup businesses to hands-on involvement in civic volunteering initiatives. The mission was clear: to actively contribute to the immediate needs of the community, from buying food to helping with shipping and assisting in survivor camps.
Leveraging the unique capabilities of Happy Things—a mental health app—Soen and her team provided their product for free to everyone in Israel, recognizing the profound impact of mental wellness in difficult times. This proactive response reflected not only a commitment to their product but also a commitment to the larger social fabric.
In the face of the company’s frozen processes — hiring halted, hiring slowed and development projects halted due to the extended military commitment — Soen acknowledged the mental toll reminiscent of the early days of the pandemic. However, undeterred, Happy Things pressed on, meeting challenges with a resilience reminiscent of Israel’s national spirit.
Fundraising, an inherently complex task for startups, took on a unique dimension for Happy Things. Unapologetically prefacing meetings with the grim reality of potential bomb alarms, Soen demonstrated the grit and determination required for startups navigating uncharted territory.
In this time of adversity, the outpouring of support from the global tech community provided an encouraging backdrop, exemplifying the power that comes from a united network. The story of Happy Things highlights not only the challenges but also the indomitable spirit and collective resilience that define Israeli founders, showing that, even in the midst of turmoil, their commitment to innovation and community remains steadfast.
5 Lessons for Integration from Israeli Tech Founders
Functional Durability: Israeli founders demonstrate the importance of business resilience in the face of adversity. Preparing for unforeseen challenges and having a flexible strategy allows a start-up to navigate the turbulent times with resilience.
Community Engagement: Active participation and community support in times of crisis is a lesson from Israel’s founders. Whether it’s contributing to civic volunteer efforts or providing essential services, fostering a strong connection with the community enhances both the company’s social impact and reputation.
Prioritizing Mental Health: Talia Soen’s example highlights the importance of prioritizing mental health. In technology, where work can be demanding, recognizing and addressing employee mental well-being is critical to maintaining productivity and fostering a positive work culture.
Adaptability and Innovation: The Israeli tech industry’s ability to adapt and innovate, even in difficult circumstances, provides a valuable lesson. Founders should foster a culture of adaptability, encouraging their teams to think creatively and pivot when necessary.
Global Network and Solidarity: Building a global network and fostering a sense of solidarity within the tech community is essential. The support Israeli startups have garnered from international peers in times of crisis demonstrates the power that comes from a connected and supportive global network. Founders should actively cultivate relationships across borders to face challenges collectively.
In conclusion, in the midst of adversity, these ideas from Israeli founders illuminate the road map for tech entrepreneurs around the world, proving that in the relentless pursuit of innovation, operational resilience becomes not just a necessity, but a transformative force, able to steer companies through the storms of uncertainty with unwavering strength and purpose.