Arab Israeli high-tech incubator raises $4.5 million

Only 2% of Israel's Arabs who study technology find jobs with Jewish employers, and many become teachers instead.

By
September 21, 2014 19:45
2 minute read.
THE TEL AVIV skyline; the area around the city is home to many Israeli start-ups

THE TEL AVIV skyline. (photo credit: REUTERS)

Takwin Labs, an incubator for Israeli Arab hi-tech entrepreneurs focused on Internet and mobile technologies, announced Sunday that it has secured $4.5 million in funding.

The Haifa-based Takwin, which means “beginning” in Arabic, was spun off from several industry leaders already active in the Arab Israeli hi-tech market: Imad Telhami, whose company Babcom is one of the largest employers of Arab engineers in Israel, Labor MK Erel Margalit, who founded Jerusalem Venture Partners (JVP), and Chemi Peres, chairman of Al Bawader, a VC (venture capital) firm that invests in Arab start-ups (and son of former president Shimon Peres). It plans to invest in four to six startups in the coming year, but also hopes to grow its fund to $20 million.

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The incubator is one of a series of initiatives in recent years designed to boost Arabs in the hi-tech field, in part by helping the sector grow its own companies. Only two percent of Israel’s Arabs who study technology find jobs with Jewish employers, and many become teachers instead.

“As an entrepreneur, I have personally experienced many of the difficulties encountered by every person seeking to realize his dreams. As an Arab entrepreneur, I have experienced the unique difficulties facing Arabs in Israeli society,” said Telhami. Takwin was set up to help Arabs overcome some of the unique obstacles they face.

Despite the difficulties, those Israeli Arabs with access to good higher education and world-class tech companies are also well-positioned to address the growing market for technology in the Arab world. The Arabic-speaking market includes over 350 million mobile users and over 120 million Internet users in 22 countries, many of which have neither diplomatic nor economic ties with Israel.

“There is huge potential among Israeli Arabs, who with investment and proper advice can achieve a breakthrough in innovative fields, giving hope to many young people in the community and showing that people believe in them and will give them an opportunity,” said Margalit.

The Bank of Israel and Economy Ministry have cited integrating Arab citizens, who are over twice as likely to be poor than the average Israeli, into the labor market as a crucial goal for Israel’s long-term economic health.

“The integration of Israeli investors and entrepreneurs, Arab and Jews alike, in the Israeli hi-tech industry will boost Israel’s GDP growth, which could reach NIS 30 billion per year within a decade,” said Peres. “The inclusion of Israeli Arabs in the Start-up Nation will serve as a bridge that will allow Israel to play an important part in our region, which could become known in the future as the Start-up Region.”

The incubator’s CEO and managing partner Itzik Frid, a former AOL vice president and adviser to former finance minister Yaakov Neeman, says there are already exciting companies in sight.

“We have already identified a series of prominent entrepreneurs and are currently proceeding with our new investments, the first of which will already take place this year,” he said.


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