The Israeli hi-tech sector is synonymous with Tel Aviv’s high-rises and expensive lunches – reasonably so, as a majority of Israeli start-ups are located in the 52 sq. km. city. However, having so many companies concentrated in one city stands as a hurdle for tech-savvy workers who don’t live nearby, and are intimidated by the notion of an hours-long commute between work and home.
For many people, taking a hi-tech job in Tel Aviv means committing to an eventual relocation of their entire family to the city, where the already-high cost of living is even more exaggerated. Just last year, The Economist named Tel Aviv the most expensive city in the world.
With a lack of thriving tech hubs located in more “peripheral” (read: non-Tel Aviv) areas, Ofir Dubovi, along with Yossi Ackerman, decided to step up and fill the void. The two cofounded OpenValley, where they now operate as investors.Based in the North of Israel, the organization operates as a “phase two” for start-ups that have graduated from the accelerator stage, investing in them and helping them scale up their businesses while also offering them office space in their facility. OpenValley’s portfolio currently features over 150 start-ups, but that number fluctuates on a day-to-day basis. Companies are drawn in by the staff’s expertise and the promise of support, though perhaps most importantly, they come because OpenValley isn’t far from home.
“I drove on a daily basis to Tel Aviv, and after doing so for more than six months, I realized that it’s really an oxymoron: the fact is that I live in an area where we have so many talented people, but once they want to establish their start-ups, they take the car and drive to Tel Aviv,” explained Dubovi. “I decided, why the hell should a start-up established around here be less successful than one established there? So then I created a community for one year, I approached Yossi about my idea, he immediately joined me and we established our first center in Ramat Yishai.”That was in 2016. Since then, OpenValley has established two more branches in Caesarea and Yokne’am, and they’re planning to establish two more in the Golan Heights and Ashdod – the latter of which will be the farthest south they’ve ventured so far.
“The secret sauce is our knowledge on how to establish an ecosystem from scratch for entrepreneurs and start-ups,” said Dubovi. “We realized that we needed to go to places where we see the right conditions for us to establish the ecosystem with those entities.”
One such entrepreneur is Yehuda Borenstein, the cofounder and chairman of carbon capture company RepAir. He noted that OpenValley became a very attractive option during the pandemic. Not only was it closer to home than Tel Aviv, it was also an escape from the trappings of the spare-room office.
“At the beginning of corona, I left my job. I could not work at home, and I searched for a quiet and good environment where I could feel comfortable, that I could walk to,” he said. “For me, it was really a second house.”
In the current hi-tech climate, there’s a severe shortage of talented developers in the workforce, which is leading large companies to look for talent outside of Tel Aviv. Earlier this week, Google announced that it is contributing $25 million toward the skill training of marginalized populations in Israel, including women, Arabs and ultra-Orthodox (haredi) Jews.
“There is a huge war out there,” said Dubovi. “The big companies are looking toward the North, because they think they’ll find good talents. We [developers] live in these areas, because in Tel Aviv competition is really crazy, and salaries are rising, so another reason for them to come is to enable those people to work close to home. It’s a win-win for everyone.”