Mind the Tech NY 2024"October 7 showed how resilient the tech ecosystem in Israel is"
Mind the Tech NY 2024
"October 7 showed how resilient the tech ecosystem in Israel is"
Maya Henkin, Director at Google Israel, was speaking on a panel at Calcalist and Bank Leumi’s Mind the Tech conference in New York. Maayan Cohen, CEO and co-founder of Hello Heart: "Two months after October 7, when investors saw that Israeli startups were delivering products no matter what, they committed to increasing investments in Israel."
Mind the Tech NY Building Blocks of Success panel
(Orel Cohen, Tomerico)
"What is amazing is that October 7th showed how great the resilience of the tech ecosystem in Israel is,” said Maya Henkin, Director at Google Israel, at Calcalist and Bank Leumi’s Mind the Tech conference in New York.
Henkin, who spoke on a panel moderated by Calcalist reporter Sophie Shulman, added: "The rise in interest rates caused a decrease in investments, and as a result many companies began to focus on profitability and not just growth. This will not be unique to the ecosystem in Israel. Now, inflation is falling and we are seeing the entry of AI. This is a revolution which creates a lot of opportunity and a lot of risks for companies. Companies are thinking about AI and how to leverage it. In Israel, following October 7, we did not see major changes in the current activities, but a change in thinking about how to help other parts of society, how to use the talent that exists in this field. At Google, we saw how It is possible to help in this situation. We launched an SMS alert product, gave grants, and supported small businesses. At the same time, many workers were called into the reserves, but despite this, we saw a lot of resilience."
Sivan Shamri Dahan, Managing Partner at Qumra Capital, added: "We manage more than a billion dollars in investments, and invest in companies in the growth stage. The last year and a half has been very difficult from a business point of view. In the bubble of 2021 and 2022, a lot of money flowed into growth companies with very high valuations. The expenses of the companies have increased significantly. But now it is much more difficult to raise money at the same valuations. That's why at Qumra we decided to be very disciplined and not to invest in new companies, but in existing portfolio companies. Now the market is coming back, with new companies that two years ago were at an early stage, and were fighting for revenues, created new categories and entered international markets. Now they are at the stage we are looking for. I look at these companies and am very proud that even after this terrible year we are still able to see such great resilient companies with great founders who lead the Israeli high-tech flagship."
Maayan Cohen, CEO and co-founder of Hello Heart, told why she returned to live in Israel shortly before October 7. "After a decade in California and Silicon Valley, I returned to Israel because it is my home. It always was and always will be. I was lucky enough to build my company in Silicon Valley, but as soon as I could, I came back. I don't regret it. 98% of our investors are American. For most of them this was their first investment in an Israeli company. These are unprecedented times, and most of them have been very supportive and we are lucky. But now we understand that venture capital does not like risk that much. At first they stopped investments. But two months after October 7, when they saw that Israeli startups were providing products no matter what, they were very excited about the resilience and now they are making a commitment and increasing investments in Israel, they understand that if we survived this we can survive any turn for the worse."
Saar Yoskovitz, founder and CEO of Augury, addressed the question of whether Israel missed the AI train? "We were doing AI before it was cool, it's called machine learning," he said. "There are many companies that leverage AI in order to produce meaningful products for their customers, and they should not be underestimated just because they do not speak the new language of artificial intelligence. An IPO is part of our journey, it is in our future. But our task now is to focus on our customers. Resilience comes from focus. The entire team is united around providing value to customers, and if there is a negative turn in the market, this is what will hold us until the market returns."
Henkin referred to the possibility that Israel missed the AI revolution train. "We are only at the beginning of the revolution, these are the first days," she stated. "But Israel is well positioned in terms of talent and the ecosystem. The change is happening all along the value chain, and Israel plays different roles in different parts. There is a lot of talent working in the field, large companies and small companies, in areas such as cloud, AI chips, LLM. We also have a team at Google Israel who is working on Gemini. A lot of things are happening at the application level, we will see a lot of startups and a lot of companies there, and Israel is well positioned to be a part of it."
Shamri Dahan also made it clear that she believes that the current interest in AI is not a passing bubble: "This will be a significant trend, like cloud computing. There is a lot to wait for, but already today we see companies that have had AI solutions for several years, that have created intellectual property that based on it it's possible to create generative artificial intelligence applications. It is amazing to see how companies reinvent themselves and build another layer based on their existing technology. We will see more and more of this, companies that lead a category with advanced technology that creates significant depth."
Watch the full exchange in the video above.
