A worldwide study released today by Startup Genome and Telefonica Digital of more than 50,000 entrepreneurs ranks Tel Aviv as the world #2 region for start-up activity. Some key findings:
- Access to Capital
: Israeli start-ups have as much proportional funding, across all investment stages, as Silicon Valley.
- Role of Angels
: Israeli Angels play a more prominent role in initial funding. Silicon Valley entrepreneurs are more likely to rely on friends and family.
- Show me the Money
: Israeli start-ups have a much higher proportion (27%) of users paying for their services, particularly transaction fees. They are much less likely to adopt advertising or licensing fees as revenue models.
- Tackling Smaller Markets
: Israeli founders are older (36.16 years) and more technical than their Valley counterparts. However, they think smaller. Silicon Valley founders are one third more likely to address a $10B+ market.
The top twenty start-up ecosystems in the world are the following:
New York City
Bjoern Lasse Herrmann, CEO of the Startup Genome calls this “the first data-driven, comparative study…to give actionable insights to entrepreneurs, investors, corporate development departments and policy makers.”
The benefit to Israel’s economy is substantial. With 5.3% of GDP allocated toward R&D (the highest in the OECD), foreign direct investment is a key pillar in Israel’s GDP, which is higher than the UK and nearly equivalent with France. In 2012, companies like Qualcomm, Intel, Cisco, Facebook and others spent more than $7 billion to acquire Israeli tech companies, compared to around $2 billion in venture funds raised.
The full report can be downloaded here