Israelis are increasingly moving to New York City to set up base and enter the US market, as war-related travel disruptions make building business challenging, 97212 Ventures says
Israeli tech entrepreneurs are increasingly choosing New York City as a hub to expand in the US, as travel disruptions brought by the almost two-year Gaza war and other challenges have made it difficult to get foreign investors on board and build their businesses.
New York is now home to about 560 privately-held startups founded by Israelis, according to a new report compiled by venture capital fund 97212 Ventures. Last year, the number of Israeli-founded startups in New York, including public companies, stood at 450, according to data by Israel Mapped in NY, a group that tracks Israeli businesses in the city.
“We are seeing dramatic growth of Israeli founders of startups over the past year moving to the Big Apple,” Eyal Bino, founder of New York-based 97212 Ventures, told The Times of Israel in an interview. “Founders who raise their first funding are moving to New York quicker than ever before to build a US base, typically six to 12 months after recruiting an R&D team in Israel.”
Since war broke out with the Hamas terror group on October 7, 2023, Israeli startups have been grappling with attracting crucial financing, in addition to contending with operational disruptions caused by prolonged military reserve duty, flight cancellations, and global investors’ caution.
As foreign airlines’ halt or disruption of service to Israel during most of the war made it difficult to do business and raise capital, many Israeli startups and tech firms encouraged their employees, often sales and marketing staff, to relocate to their target markets in the US.
“With fast developments in AI and bigger competition in almost every tech category, startups need to grow faster and be closer to customers,” said Bino. “It’s hard to do this for Israeli founders over Zoom or come to New York every few months, especially when there are travel issues and tickets are expensive, so it makes more sense to just move quickly.”
The 97212 report found that 30 percent of the Israeli-founded businesses setting up a base in New York are early-stage startups. In terms of industries, there are 60 cybersecurity startups and the remainder operate in the areas of AI, enterprise software, fintech and financial services, Bino said. About 15% of the startups have a female member in the founding team.
Out of the 560 Israeli-founded startups based in the city, 27 are unicorns, or companies worth more than $1 billion, compared with about five in 2019. Statewide, California has the most Israeli-founded unicorns in the US with 35.
New York has evolved into a global hub for Israeli-founded startups and businesses as they seek to grow beyond Israel’s small domestic scene and expand to the US market. The reasons New York is such a top tech hub for Israeli entrepreneurs, suggested Bino, are that the metropolis offers Israeli companies access to US public markets, a larger pool of investors and customers, including the American public, as well as access to US-based venture capital funds.
“If before, the number one destination for Israeli startups, especially for cyber companies, was Silicon Valley, there’s no question anymore about why [many choose] New York versus the Valley — because of the time difference, the Israeli community of entrepreneurs, vast access to capital and customers, and a thriving ecosystem,” said Bino.
Over 20,000 Israelis call New York City home. Additionally, the city has the largest Jewish population of any metropolitan area in the world outside of Israel, according to the New York City Economic Development Corporation (NYCEDC). It is also home to more than 25,000 startups and over 300 VCs.
“What we’re seeing in the tech community in New York is a lot of respect for Israeli founders that they’re able to persevere even though the last two years have been really difficult,” said Bino.
Founded in 2022, 97212 is a $20 million fund that invests in Israeli early-stage startups, and facilitates their entry into the US market to help them grow their businesses.
https://www.timesofisrael.com/dramatic-growth-nyc-is-home-to-560-tech-startups-founded-by-israelis-report-finds/amp/
