The past year has been great for the development of innovative technologies in Israel.
A brief look at the numbers shows that the end of 2021 marked a record high in the money raised within the hi-tech sector – an unprecedented $25 billion, representing a 136% increase over 2020, and a tenfold increase in start-up capital raised over the five years prior.
As home to 32% of the tech companies in the country, Tel Aviv still retains its position as the nation’s hi-tech capital. The city has seen some impressive growth. Last year alone saw a record-breaking $20b. in capital raised by Tel Aviv-based tech companies, according to a recent report published by the Tel Aviv Municipality’s Center for Economic & Social Research, Tel Aviv Global & Tourism and IVC Research Center.
Tel Aviv Mayor Ron Huldai celebrated the city’s rapid growth. “In the past year, I have visited a variety of tech companies in Tel Aviv, from new start-ups developing groundbreaking technologies to scale-up companies with products that are already widely used around the world,” he said. “The creative spirit of the city and its entrepreneurs never stop innovating, imagining and developing. I believe that the ideas born here today will change the world tomorrow.”
All of the money flowing into Israel’s hi-tech sector is indicative of the growing faith that investors have in the potential held by the nation’s start-ups and their tech solutions.
As a result of the expanding amount of capital being introduced into the ecosystem, more and more start-ups are finding themselves in a position where the best next step is to use their cash flow for growth and expansion (or “scaling up,” as the LinkedIn types call it).
So many companies are scaling, in fact, that some experts are suggesting that Israel is undergoing an evolution, from the Start-Up Nation to the Scale-Up Nation.
“If you look at the success of Israeli companies, you realize that there has been a kind of shift to a scale-up nation,” said Prof. Moshe Zviran, former dean of the Coller School of Management in an interview with The Jerusalem Post. “If you look at what’s happening in Israel, you’ll see that more and more companies have led VCs [venture capital firms] to good or excellent return on investment. This isn’t just attributed to luck – the investors realize that this is the best source for talent. Israel is known for its talent.”
A look ahead
So the Start-Up Nation is growing up, but what kind of technologies are pushing it forward?
Israel’s hi-tech sector is as broad as it is saturated – which is to say: very – so covering each specific field would be better suited for a book than a 1,200-word article. With that in mind, here are just a few start-ups representing some of the most interesting fields of technology that Israel is innovating in.
Over the past few decades, cow milk’s monopoly on the “white stuff to put in your coffee” market has been challenged by quite a few contenders.
From soy beans and almonds to rice and oats, milk alternatives have popped up and sequestered a reasonable amount of market share, driven by a few different factors: health-related, environmental or sometimes even just due to preference of flavor.
While the number of alternatives continues to increase, there’s no denying that most consumers prefer that good old-fashioned bovine by-product. However, several companies within Israel’s food-tech sector are working to create something that captures the best of both worlds: milk that is identical to cow’s milk on a cellular level, but without requiring the mega-polluting, resource-gobbling industrial farming system currently in place.
Remilk is one of those companies. “It is essential for the future of our planet that we liberate the food chain from dependency on animals. We do so by crafting real dairy that tastes and feels the same, minus the cow,” said Remilk CEO and co-founder Aviv Wolff.
The company’s fermentation-based technology creates a product that has smitten investors – Remilk has raised over $130 million and is currently building the world’s largest precision fermentation plant in Denmark in order to scale up its production.
“Not only are Remilk products cleaner and significantly more sustainable when compared to traditional dairy, but they are indistinguishable in taste, feel and texture,” said Pasha Romanovski, founding partner of Hanaco Ventures, one of Remilk’s investors. “Remilk also employs production methods that are radically more sustainable than traditional production methods today.”
Fueled by the understanding that climate change is becoming a pressing issue in the public consciousness (and thereby becoming a pressing issue on investors’ portfolio dream boards), Israel’s climate-tech sector is rapidly gaining momentum.
Among the myriad solutions that are being developed in the space – including solar and hydrogen power, AI-run precision agriculture and the new-milk mentioned above – one of the biggest innovations within the sector to date comes from UBQ Materials.
UBQ is an Israeli start-up that converts unsorted household waste (including all of the organic stuff that doesn’t typically recycle) into a post-consumer recycled thermoplastic, which can be used to manufacture a host of durable products.
That thermoplastic is a way more environmentally friendly alternative to PVC and other polymer-base plastics, which recycle poorly and don’t have the greatest track record in keeping landfills – or turtles’ nostrils – empty.
UBQ’s product is revolutionary in that it’s 100% recyclable, and it comes in raw material pellets that are compatible with already existing plastic molding infrastructure in factories around the world, poising it as a practical alternative for companies wishing to keep making plastic products, but without all that messy “killing the planet” stuff.
“Every product can be reimagined to have a big environmental impact with simple material replacements,” said Tato Bigio, UBQ Material’s co-founder and co-CEO. “By replacing oil-based plastics with UBQ in conference infrastructures, we are demonstrating that events, as well as the larger building and construction industry, can serve as engines of a circular economy.”
The medtech sector is one of the fundamental building blocks of Israel’s hi-tech success. Surgery-free gastric bypass alternatives, 3D-printed cornea implants, a toilet seat that checks out your pee and uses artificial intelligence to tell you whether you’ve got a urinary tract infection – Israeli med-tech has it all.
One of the more bizarre-in-a-good-way start-ups offering a medical innovation is SpotitEarly, a company that detects early signs of cancer by leveraging one of the most valuable resources on the planet: dogs.
People have told stories for decades about dogs that have detected cancer in their owners purely by sense of smell. In fact, research has shown that the theory has legs (four furry ones, actually). SpotitEarly saw this and said “yeah, okay, let’s use that.”
The company’s technology is based on dogs’ profound ability to smell what SpotitEarly refers to as the “cancer odor.” All customers need to do is put on a SpotitEarly mask, breathe for a few minutes, then package up the mask and ship it to the company’s lab (and shih tzu, and retriever — you get the idea). Within SpotitEarly’s detection facility, several dogs are trained to sniff the sent-in samples. Upon sniffing cancer, the dogs give off certain body language cues which are picked up on by an AI monitoring system.
Following the scanning process, the company is able to detect and alert patients of the presence of cancer in their bodies within just a few days. The breath test can detect the presence of several different cancers in one person’s body (because each one has its own unique smell): lung, prostate, breast and colon cancer, with more types to follow in the future.
“The statistics speak for themselves,” said CEO and co-founder Ariel Ben Dayan. “Nine out of 10 cancer patients who discover the disease early will survive. In contrast, unfortunately, nine out of 10 who discover it late will not survive. The ability to combine technology with a canine’s developed sense of smell, to create an accessible and accurate test that covers many different cancers, will significantly increase the number of people who get tested regularly. It will contribute to the saving of many lives.”
May the new year bring many more innovations – hopefully involving many more dogs – and may the growth of the hi-tech sector be outpaced only by the country’s rapidly expanding fiber-optic Internet infrastructure. Amen.