The 50 Most Promising Israeli Startups - 2021

This article first appeared on April 14, 2021 and is being reshared as part of CTech's Top 10 stories of 2021.

Click here for the 2022 edition of Israeli top 50 most promising startups 

Even the biggest optimists couldn’t predict the turnaround that the Israeli tech sector experienced over the past year. April of 2020 was a period of crippling uncertainty, with the entire county under lockdown, businesses closing down and mass waves of layoffs and furloughs, with a seemingly inescapable economic crisis arriving in the wake of the Covid-19 pandemic. But the local tech scene went on to see a 25% increase in capital raised with nearly $10 billion flowing into the sector by the end of 2020. Funding rounds of $100 million, $200 million, and even $300 million became par for the course and more than 20 new unicorns emerged, nearly doubling the previous count.

The result is not just a tech bubble that detached itself from the rest of the market, but the development of two divergent schools of thought within the industry itself. On one side, there are the companies and founders that side with rapid growth and huge funding rounds, while on the other there are those who insisted on adopting more gradual growth and found themselves refusing investors who were knocking down their doors. The former appear in this year's unicorns list, while the latter make up Calcalist’s ranking of the 50 Most Promising Startups.

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The VC industry’s natural tendency, indeed that of the entire financial sector, is to measure success according to valuations, based on the reasoning that the higher the valuation, the more successful the company is. This reasoning is not necessarily accurate, and even less so when it comes to the venture capital market, where the factors that go into determining valuations — and particularly the identity of those making the choices — are not objective and are heavily influenced by parameters that don’t necessarily indicate success.

Moreover, some entrepreneurs have an easier time raising capital than others, they like the investors and the investors like them. Others prefer the tight-knit work alongside their team members; often they are the kind of founders who still open their computers to write code from time to time. It’s important to note that the companies who chose not to secure funding rounds this year are those who could afford to give up on the capital simply because their revenues grew at a scale that enabled massive growth even without new investments.

In any case, after the capital bonanza of 2020, enterprise valuations have become almost irrelevant. There are quite a few companies on the ranking that are already generating revenues of $100 million or more a year — far more than what some of the new unicorns are bringing in.

In the absence of a different method for measuring things, valuations will continue to drive the activity of the venture capital industry and it’s safe to assume that the massive funding rounds witnessed lately will impact Israel's tech culture throughout the coming years. Some founders will take advantage of the demand to liquidate their holdings early on and a brutal competition over talented employees will engulf some sectors, and in turn will only increase reliance on foreign developers.

Over the previous 12 years that the ranking has been published, we at Calcalist have insisted on highlighting the companies that according to our assessment will become the next big thing. We did so, not just based on their valuations by venture capital funds, but by using parameters that are as objective as possible: the product they develop, the market they operate in, their competition, the innovation on display, the knowledge they have accumulated, the quality of their founders, and the experience of their investors. We did the same thing this year. The process may have been more complicated under the constant thunderous barrage of new investment figures, but it was no less enjoyable and the results, we hope, are no less accurate than in previous years.

- Hagar Ravet

1. Minute Media

Product: Digital media platform

Year founded: 2011 • Founders: Asaf Peled, Gili Beiman, Yuval Larom

Employees: 400 (100 in Israel) • Funding: $180 million from Battery Ventures, Qumra Capital, Gemini Israel Ventures, Sampoerna Strategic, Vintage Investment Partners, and Dawn Capital

No fleeting success

As the pandemic resulted in the sports industry’s darkest days, fan content platform Minute Media was able to increase both the number of users and their level of engagement

Minute Media came to life as a result of Peled’s dream of working in something sports-related, and probably due to a touch of clairvoyance. The company that developed a platform that enables sports fans to create unique content now controls five media brands that employ its technological solution. Over the past two years, Minute Media carried out four acquisitions, including the popular American media brand The Players’ Tribune. The company boasts more than 350 million monthly users and more than 4,000 content producers that together create 20,000 unique offerings every month. According to a source familiar with the company, it generates $170 million in annual recurring revenue, a high amount relative to the local tech scene.

Minute Media's team. Photo: Amit Shaal

Like many tech companies, particularly content producers, Minute Media registered impressive growth during the pandemic, even though competitive sports had all but come to a standstill. In a special interview with Calcalist, Peled talks about how he turned his dream into a reality, the competitive landscape his company stepped into, and his plans for the future which include a focus on women’s sports and the blistering eSports scene.

- Hagar Ravet

Product: Customer authentication

Year founded: 2014 • Founders: Mickey Boodaei and Rakesh Loonkar

Employees: 100-200 in Israel and an additional 100 spread out across the world • Funding: Zero outside funding

A rare bootstrapped gem

After a series of successful exits, Mickey Boodaei and Rakesh Loonkar are turning Transmit Security into an independent Israeli powerhouse

Israeli cyber companies are known as serial fundraisers, who embark on a new round as soon as the previous one is secured. Transmit Security is an odd duck in the local pond, in that it could have had its pick of investors, but aside from an initial founders’ loan, which has long since been paid back, it has raised no external capital. The company, which developed an app-free portable authenticator that uses device-based biometrics for customer authentication, has managed to generate $100 million in annual revenues, boasting a 50% growth rate. It counts major banks such as UBS, Wells Fargo, Santander, HSBC, and Israel’s Bank Leumi among its clients.

Transmit Security co-founder Mickey Boodaei. Photo: Amit Shaal

In an interview with Calcalist, Mickey Boodaei talks about the company’s journey so far, the importance of being user-friendly, and its plans for the future (“When we decide to go public it won’t be via a SPAC”) and offers his take on the thriving Israeli cyber community.

- Meir Orbach

Product: Automated transcription service

Year founded: 2017 • Founders: Tom Livne, Eric Shellef, Kobi Ben Tzvi (the latter two are no longer active in the company)

Employees: 145, plus 30,000 freelancers • Funding: $122 million from Stripes Group, Viola Ventures, Vertex Ventures, Oryzn Capital, HV Holtzbrinck Ventures, Clal-Tech, and Sapphire Ventures

Filling a void

Verbit is a market leader in the automated transcription industry, becoming one of the world’s largest captioning providers and can even detect contradictions in text

Verbit is a fascinating example of a tech company that identified a specific need, developed advanced technology to meet it, and became the dominant brand, if not the only player of its kind, in the sector. In Verbit’s case, it is automated text transcription technology that currently focuses on three main content fields: law, media, and education. The company’s tech is augmented by the help of more than 30,000 human transcribers from more than 120 countries, who work on a freelance basis to improve the accuracy of the automated translation, which still faces difficulties overcoming things like strong accents, the pace of speech, industry-specific jargon, and background noises.

Verbit founder Tom Livne. Photo: Amit Shaal

Naturally, Covid-19 increased demand for the company’s products. In the education world, for example, the switch to remote learning emphasized the need for lecture transcription. In order to increase its capabilities and its media sector client base, Verbit recently acquired a traditional transcription company and switched its clients over to its own platform, a move that made Verbit one of the leading captioning providers in the world. The company is bent on making further acquisitions and even employs a team, whose sole job is to identify potential targets and ease their integration into the company.

In an interview with Calcalist, Tom Livne discusses how he identified the company’s use case as a lawyer 10 years ago, what it’s like competing with the likes of Google and Microsoft, and the dozens of new verticals Verbit is looking to expand into.

- Hagar Ravet

Product: Front-end website building tools for WordPress

Year founded: 2016 • Founders: Yoni Luksenberg, Ariel Klikstein

Employees: 250 • Funding: $16 million from Lightspeed Venture Partners and Globis Capital Partners

Breaking into the Big Leagues

The spike in demand for Elementor’s website building tools nearly led to its support center collapsing. Now it is recruiting new employees, opening a new development center in the Negev, and launching a cloud-based product

Elementor has moved well past being known as ‘that ultra-Orthodox startup” on the list. The company which started out as a graphic design studio, may be a success story out of the predominantly Haredi city of Bnei Brak, but it made the list on merit. Elementor develops tools for website building professionals that are offered free of charge as open-source code; payment is only for its premium version. The pandemic, which forced many small business owners to quickly establish a digital presence, caused a massive spike in demand for the company’s products, so much so, in fact, that its support department nearly collapsed, forcing it to temporarily halt the onboarding of new clients. In order to meet the demand, Elementor embarked on a hiring spree and is about to open a new development center in the Negev that will employ 30 people. In addition, the company recently quietly launched a beta version of its new cloud-based product, putting it on track to join the big leagues alongside the worlds’ largest website-building companies.

Elementor co-founders Yoni Luksenberg and Ariel Klikstein. Photo: Amit Shaal

What stands Elementor apart is its insistence to stick with open-source code and the fact that it puts professional users, not amateurs, at the forefront — people who require tools that will make their lives easier, while providing sophisticated and cutting-edge performance. Elementor hopes to recruit nearly 200 employees in 2021 to keep up its current growth momentum.

All that has been spearheaded by two outsiders who so far have raised less than $20 million. Perhaps the rest of the industry has something to learn from them. 

- Hagar Ravet

Product: Network security solutions for data centers

Year founded: 2013 • Founders: Pavel Gurvich, Ariel Zeitlin, and Dror Sal'ee

Employees: 250 • Funding: $110 million from Qumra Capital, Cisco, Dell, DTCP-Deutsche Telekom Capital Partners, Partech, ClalTech, Battery Ventures, 83North, Greylock, TPG, and Ehud Barak

Protectors of the cloud

Cloud service protection, which is GuardiCore’s specialty, emerged during the pandemic as one of the best sectors to be in as more and more large companies accelerated their services transition to the cloud

GuardiCore is a member of Israel’s most exclusive club — cloud protection providers, an industry that draws hundreds of millions of dollars in investments. Despite receiving a multitude of investment offers, the company decided to ride out the year without raising new capital, its latest round having been completed in 2019.

Two of the company’s founders, Pavel Gurvich and Ariel Zeitlin, first met during their military service and when they were discharged they decided to found a startup together, determined that it would not deal with cybersecurity. However, despite their determination, they discovered that every other field they came up with suffered from security problems, so ended up sticking to what they knew best. GurdiCore’s technology enables large companies, such as financial institutions, to compartmentalize their servers in order to prevent security issues, data breaches, and identify attacks. What's unique about GurdiCore’s solution is that it is purely software-based and doesn’t require any hardware installation on clients’ servers. Most large companies nowadays, employ a large number of private and public servers, with the more activity there is on the cloud, the more difficult it is to track and map out. GuardiCore’s product enables clients to attain a clear picture of what’s taking place on the cloud in order to determine key rules and detect vulnerabilities and breaches.

Guardicore co-founders Ariel Zeitlin (left), Pavel Gurvich, and Dror Sal'ee. Photo: Amit Shaal

Covid-19 may have accelerated the transition to the cloud and led to handsome growth in the company, but at the start of it, the company experienced great uncertainty, which caused it to halt recruiting new employees and cut back on expenses. As a result, it completed 2020 in possession of most of the funds from its previous funding round and a balance that for the first time brought it close to profitability. The company aims to put its foot back on the gas pedal this year, recruiting 100 new employees, moving to larger offices, and accelerating growth.

- Hagar Ravet

Covid-19 forced HoneyBook to adopt a new business model, switching from supplying business management networks to providing small businesses with credit

HoneyBook was founded in 2013 as a company that offered American small businesses and solopreneurs tools for business and financial management, that allowed them to provide processing services, issue invoices, etc…. When Covid-19 shuffled the cards, the company suffered a blow: hundreds of businesses, mostly from the events industry, froze their operations nearly overnight. HoneyBook’s volumes plummeted to zero and it was forced to take protective measures, including cutting salaries. Instead of collapsing though, HoneyBook managed to bounce back in breathtaking fashion.

The big change came once HoneyBook’s managers decided to think outside the box: In interviews with Calcalist, its founders described how they came to the conclusion that the pandemic was the best time to take risks. Upon seeing a sharp increase in demand for the processing services it offered small enterprises, it identified the opportunity to offer them lines of credit on a factoring model: when its clients need to bankroll a deferred payment, HoneyBook advances them the money in exchange for a commission and puts the deferred payment on its own books. Another product the company offers allows businesses to bypass the traditional three-day waiting period and receive the money from HoneyBook immediately, for a fee. In both cases, the risk that HoneyBook takes on is minimal, both because of the low sums and because it is intimately familiar with the clients’ revenue flow.

HoneyBook co-founders Oz Alon, Naama Alon, and Dror Shimoni. Photo: Amit Shaal

This year is expected to be a particularly strong one for the company. It is already witnessing an increase in demand from small businesses as well as a diversification of its clientele: now in addition to the events industry, which is gradually resuming activity, a new wave of consultants, personal trainers, coaches, interior designers and many more are joining HoneyBook’s ranks. The company's revenues have doubled and are reaching tens of millions of dollars. Its employee headcount is also expected to double this year. On top of that, it is set to sign financing agreements with several U.S. banks and financial institutions that will allow it to offer larger lines of credit.

- Meir Orbach

Product: Development platform for video game apps

Year founded: 2010 • Founders: Uri Marchand, Alon Rabinovitz, and Gil Or

Employees: 81 • Funding: $75 million from Ubisoft, Meg Whitman, Griffin Gaming Partners, Insight Partners, Warner Music Group, Jibe Ventures, Gen G. chairman Kevin Chou, Intel Capital, Liberty Technology Venture Capital, and Marker

Playing with the big boys

Overwolf, a development platform for video game apps, secured investments from Meg Whitman and Ubisoft and acquired CurseForge, paving its way to a major breakthrough

Covid-19 gave the video game sector the final seal of approval it required to become a legitimate investment channel. After Playtika’s giant IPO announcement in January, along came Overwolf in March and announced a $52 million financing round — with the participation of industry powerhouse Ubisoft and Meg Whitman, who is one of the most esteemed executives in Silicon Valley — proving that the potential of the Israeli gaming sector was just only taking its first steps. Overwolf was valued at $200 million, which is mostly a testament to the modesty of its founders who didn’t rush to achieve an overly bloated valuation.

Overwolf, which developed a platform that enables creators to build, distribute, and monetize in-game apps and mods for PC games (such as Counter-Strike, League of Legends, and Fortnite) is headed towards a major breakthrough in the coming year, following its acquisition from Twitch of the CurseForge platform — the world’s biggest repository of mods for video games, including for games such as World Of Warcraft and Minecraft. The acquisition allows Overwolf, for the first time ever, to offer the global gaming community the chance to develop new mods for all of the leading games. With the assistance of some super-investors, the company is now on the cusp of a revenue breakthrough and is already reporting significant growth.

- Meir Orbach

Product: Public transit optimization software

Year founded: 2014 • Founders: Amos Haggiag and Eitan Yanovsky

Employees: 150 • Funding: $160 million from Bessemer Venture Partners, Insight Partners, Verizon Ventures, Pitango, and New Era

Life in the fast lane

When Covid-19 transformed public transportation, Optibus leaped on the opportunity with its cloud-based remote transportation management solution

The coronavirus pandemic struck a severe blow to public transportation, routes that once bustled with passengers were suddenly discontinued and new ones, adapted to the demands of the pandemic, appeared on the scene. Most of the public authorities, companies, and organizations that operate in the space were forced to cope with the changing reality while using antiquated technology. That’s where Optibus entered the picture with its cloud-based optimization engine that enabled stakeholders to adjust to the frequent changes: clients could plan travel routes, schedule their vehicles and operators, and manage the entire transportation grid remotely, from any spot on the globe.

Optibus co-founders Amos Haggiag (left) and Eitan Yanovsky. Photo: Yuval Chen

Like other Israeli companies, Optibus was facing a great deal of uncertainty a year ago. That changed pretty abruptly when demand started flowing in — from existing clients, but mostly from local authorities and transportation companies. Nowadays, the company boasts 450 clients all over the world (including New York, Los Angeles, London, Melbourne, Brasilia, Hong Kong, Israel and Singapore) and raised a handsome sum of $107 million in March 2021.

- Meir Orbach

Product: Predictive log analytics platform

Year founded: 2014 • Founders: Tomer Levy and Asaf Yigal

Employees: 250 (170 in Israel) • Funding: $121 million from General Catalyst, OpenView Ventures, 83North, Vintage, Giza, Greenspring Associates, and Next47

Logic-based success

The digital transformation that the business world experienced generated a string of new clients for Logz.io. When it became an industry leader in open source ELK, the door was opened to new collaborations with companies all over the world

Everyone knows that every action we take online, from making online purchases to checking our bank balance, generates data that is accumulated by companies and organizations. That data is organized in logs — files that record every transaction made using the software. Logz.io developed an open-source code that helps programmers detect possible issues in the files and enables companies to manage their data protection and monitor it to ensure that everything is working as it should.

The usual suspects when it comes to Logz’s client base are startups who themselves are developing code and employ a large number of programmers, but Covid-19 brought players from more traditional businesses, that are undergoing rapid digital transformation, into the fold. Last year, also saw a revolution in the open-source code world when Elastic, which developed a highly popular one called ELK, decided not to support it any longer. Logz.io took it upon itself to continue managing the code, which caused dozens of tech companies that wanted to take part in the project into Logz’s sphere, including a young company by the name of Amazon.

- Hagar Ravet

Product: Music, video, and images licensing platform

Year founded: 2016 • Founders: Ira Belsky, Itzik Elbaz, Assaf Ayalon, and Eyal Raz

Employees: 180 • Funding: $48 million from KKR and Elephant Partners

Where Youtubers go to shop

Hoisted by coronavirus-backed growth, Artlist continues to establish its position as a developer of content for video makers

Artlist, which started off as a technology company that developed content tools for video makers, is now an empire that builds and maintains a vast subscription-based catalog of digital assets that includes music clips, and sound effects for video projects.

Covid-19 left billions of people at home, which in turn dramatically increased their time on social media and raised content creators to lofty positions. Many such creators make use of Artist’s catalog to add sound and images to their work. In recent years, the company has grown at a rapid rate and its managers say revenues have increased accordingly making the company profitable, an uncommon feat when it comes to growth companies, who often choose rapid growth over profitability. The company, which was founded in 2016, was bootstrapped up until its first funding round in 2018 and it completed a second one in 2020.

Near the end of the year, Artlist acquired U.S.-based Motion Array, which too provides a catalog of products for video makers. The acquisition doubled Artlist’s reach to six million global users and increased its offering by 500,000 new digital media options.

- Meir Orbach

TytoCare’s equipment enables various medical tests to be carried out at home and is proving popular in the U.S. and U.K.

Israeli readers need no introduction to TytoCare: The product it developed is available to clients of local healthcare providers and its use has only gone up over the past year. Like many companies in the telemedicine field, Tyto experienced a surge in demand during the pandemic. The solution it offers, however, isn’t derived from any specific disease but instead from the continuously growing burden on healthcare systems around the world due to aging populations.

Even though the telemedicine industry has taken center stage, it is important to note that in order to realize the mind-boggling potential of remote healthcare, the proper equipment is required. A virtual visit to the doctor will be forced to remain in the realm of science fiction unless the hardware and software to enable it exists. That’s where TytoCare comes in.

TytoCare co-founders Dedi Gilad and Ofer Tzadik. Photo Tommy Harpaz

In the wake of the Covid-19 pandemic, Tyto tripled its sales; and since it operates on a subscription basis, it must be able to show that its technology is consistently being used by both doctors and patients.

Over the past year, Tyto carried out close to 650,000 examinations and is being regularly used by 8,000 physicians. The company is currently in negotiations with one of the biggest technological players in the field, has begun working with some of the largest healthcare providers in the U.S., and has established a significant foothold in the European market too, by collaborating with the UK’s NHS

- Hagar Ravet