Israel is a small country with a big reputation when it comes to innovation and entrepreneurship. In recent years, Israel has emerged as one of the most exciting places in the world to invest in start-ups, with a thriving tech ecosystem that has produced some of the most successful companies in the world. From cybersecurity and artificial intelligence to fintech and biotech, Israel is home to a wide range of innovative start-ups that are attracting investors from around the globe.
One of the most dynamic events on the Israeli tech calendar is Fintech Week, an annual gathering of innovators, investors, and thought leaders in the financial technology industry. Fintech Week is a week-long event that takes place in Tel Aviv, bringing together start-ups, established companies, and investors from around the world.
The event provides a platform for fintech companies to showcase their products and services, and for investors to discover new investment opportunities in the sector. With keynote speeches, panel discussions, and networking events, Fintech Week offers a unique opportunity for participants to engage with some of the most innovative and disruptive companies in the industry.
The rapid growth of Fintech Week
Fintech Week has grown rapidly in recent years, reflecting the growth of the fintech sector in Israel and worldwide. As the fintech landscape continues to evolve and new technologies emerge, Fintech Week remains at the forefront of the industry, providing a forum for the exchange of ideas and the exploration of new opportunities.
Jonny Paul, director of Fintech Calling, a B2B Fintech conference production company, is the mastermind behind Fintech Week. Speaking with The Jerusalem Report from the Tel Aviv Stock Exchange on Day 2 of the conference in early March, Paul stated, “I have a huge affinity to Israel. It is renowned as a hub of innovation. The innovation and start-up scene is known worldwide. We saw an opportunity to bridge the divide and showcase Israeli innovation. Fintech is all about collaboration, and there are huge opportunities within the Israeli ecosystem. In 2017, we set up Fintech Week in Tel Aviv, a three-day event at the Tel Aviv Stock Exchange. We bring in Israeli start-ups at all levels. We bring in a lot of internationals that are interested in collaborating and investing and in acquiring.”
“I have a huge affinity to Israel. It is renowned as a hub of innovation. The innovation and start-up scene is known worldwide. We saw an opportunity to bridge the divide and showcase Israeli innovation. Fintech is all about collaboration, and there are huge opportunities within the Israeli ecosystem. In 2017, we set up Fintech Week in Tel Aviv, a three-day event at the Tel Aviv Stock Exchange. We bring in Israeli start-ups at all levels. We bring in a lot of internationals that are interested in collaborating and investing and in acquiring.”
Jonny Paul
Now, seven years later, Fintech Calling has grown tremendously. It is working very closely with Israeli authorities, ranging from the Bank of Israel and the Israeli Securities Authority to the Israel Export Institute, which have helped to bring overseas delegations to the conference.
“It’s all about showcasing Israeli innovation. When I see companies coming together and when I hear about successful collaborations, it makes me happy,” Paul said. “This year, we have ZeePay, a Ghana payment company. They’ve been a part of Fintech Week for the last three years. In those three years, they have established collaborations with Israeli start-ups. That brings me a lot of joy. It’s all about collaboration.”
Nathan Joel, originally from Australia, made Israel his permanent home five years ago and is now the director of Growth for Kipp, an Israeli start-up based in Herzliya and backed by TLV partners. He was attending Fintech Week to meet with overseas banks and to establish connections in the local ecosystem, Israeli-based start-ups, investors, and potential partners. “For us at Kipp, we focus on solving the problem of when you check out on a website with your credit card and the credit card company declines your transaction. We focus on helping merchants and credit card issuers actually approve that transaction so that more sales go through, providing a better experience for the consumer.”
Talking about the benefits of working in the Israeli market, Joel said: “Israel is a hub of innovation for fintech companies. The big fintech companies such as Riskified have spawned a number of second-generation fintech companies such as Kipp. Tel Aviv has been a great place for us to established and get the advice of local experts. One of the key benefits of being here is the support of the ecosystem and how tightly connected everyone is here in Israel. It’s a real benefit for us, from being able to do business with a local bank to having the support of Mastercard’s Finsec Innovation Lab through to support from the Israel Innovation Authority, where we’ve also received some funding.”
INNOVATE FINANCE, the independent industry body for UK fintech, was also in attendance. Veronica Glab, head of engagement for Innovate Finance, spoke with The Jerusalem Report about why attending Fintech Week was a must for Innovate Finance. “We came to speak to the international investment landscape and really look at the venture funding into global fintech, as well as across different global regions, verticals, and really analyze the latest trends. We also wanted to get to know the Israeli fintech ecosystem. We have a number of partnerships with fintech Israel, and we’re very excited to see such a burgeoning market in such a small country. Israel has demonstrated its resilience and its innovation over the last 10 years. There’s a really strong fintech ecosystem here, and there’s a vested interest from the UK and the Israel side to build a thriving ecosystem and a bridge between the two countries. At Innovate Finance, we couldn’t be more excited about that!”
Paul Kenny, representing VacuumLabs, a company that develops products and services in the fintech sphere, summed up in one line why Israel is such an important destination for this industry: “Israel is the Start-Up Nation.”
He added, “There are so many tech companies here. And Israel is the most successful country in the world, outside of the US, at attracting venture capital.”
Alexandre Gaillard is CEO of InvestGlass, a sales automation solution for banks based in Switzerland, which is planning an expansion into Israel and opening an office in Tel Aviv in 2023. Why Israel? Gaillard responded, “We just opened an office in Dubai and are glad to see the good relationship between the Emirates and Israel, so it’s a logical continuation of our business expansion in this part of the world.”
Israel is one of the leading countries in terms of hi-tech innovation as demonstrated by the participants of Fintech Week. The main reasons that it can be a good opportunity to invest in hi-tech in Israel are the following:
- Skilled workforce: Israel has a highly talented workforce, with a strong emphasis on STEM (science, technology, engineering, and math) education. This means that there is a large pool of well-educated individuals who can contribute to hi-tech innovation.
- Government support: The Israeli government has been a major supporter of its hi-tech sector, which has become one of the most dynamic and innovative in the world. The government provides a range of support mechanisms to promote growth and development in the sector, such as tax incentives, grants, and funding for research and development (R&D).
These include a reduced corporate tax rate for eligible companies, as well as tax credits for R&D expenses. The government also provides grants to hi-tech companies at various stages of development, from seed funding to expansion. These grants can be used for a variety of purposes, such as R&D, product development, and market entry. The Israeli government itself invests heavily in R&D through its own research institutions and through partnerships with private industry.
This funding supports basic and applied research in a wide range of fields, such as biotechnology, cybersecurity, and artificial intelligence. Overall, the government’s support for the hi-tech sector has been a key factor in the sector’s success, helping to create a thriving ecosystem of innovation, entrepreneurship, and investment. This support has also helped to attract international investment and talent, further strengthening Israel’s position as a leading hub of hi-tech innovation.
- Access to capital: Israel has a robust venture capital industry, with many Israeli VC firms investing in hi-tech start-ups. This provides access to capital for new start-ups and helps fuel innovation.
- Global market: Israel is strategically located at the crossroads of Europe, Asia, and Africa. This provides Israeli hi-tech companies with access to a global market and enables them to easily connect with customers and partners from around the world.
- Entrepreneurial culture: Israel has a strong culture of entrepreneurship, with many successful entrepreneurs and start-up founders. This culture encourages innovation and risk-taking, which is essential for the hi-tech sector.
Potential risks in investing in Israel
LIKE ANY investment, investing in Israel carries some risks. Some of the potential risks that investors should be aware of include the following:
- Political instability: The Israeli-Palestinian conflict and tensions with neighboring countries can create political instability, which may negatively impact the economy and markets.
- Security risks: Israel faces security risks from terrorism, cyber attacks, and geopolitical tensions. These risks could impact the safety of investors and the stability of the markets.
- Regulatory and legal risks: Like any country, Israel has its own regulatory and legal environment, which may differ from that of other countries. Investors should be aware of the local laws and regulations that may affect their investments.
- Currency risk: Investing in Israel involves exposure to the Israeli shekel, which may fluctuate against other currencies, potentially impacting the value of an investor’s holdings.
- Economic risks: Israel’s economy is heavily dependent on exports, particularly in the hi-tech sector. A slowdown in global demand or changes in trade policies could negatively impact the economy and markets.
Despite these risks, many investors see Israel as an attractive investment destination, particularly in the hi-tech sector, due to its strong economic fundamentals, innovative and entrepreneurial culture, and supportive government policies. As with any investment, it is important to conduct thorough research and due diligence before investing in Israel. ■