The past few months have been extremely challenging for Israeli tech founders.
On the one hand, we are in a down market where VCs are deploying less capital, and that has resulted in a 70% drop in funding in the first quarter of 2023 compared to the same time last year. On the other hand, there is political chaos in Israel around the overhaul of the country’s judiciary, and that has raised serious questions around the future of the country’s startup ecosystem.
Global VCs and LPs recognize the exciting opportunity of investing in top Israeli talent, but today, they are cautious.
As entrepreneurs and investors seek stability, some are left wondering if this is the right time to invest in startups based in Israel given the political climate. Against that backdrop, New York City is emerging as a viable alternative for Israeli startups seeking a more predictable environment in which to grow.
NYC is already home to over 400 Israeli startups, and has become the go-to-hub for Israeli founders expanding to the U.S. market over the past few years. The Big Apple offers advantages for Israeli startups, such as a large and diverse talent pool, access to funding, and close proximity to customers and partners.
The city of New York has identified a new opportunity now – luring more Israeli startups to join its vibrant tech scene by making it even more attractive to build and grow their businesses.
Can NYC challenge Startup Nation?
Startup founders also recognize that there’s a lot NYC has to offer. Despite current market conditions, enterprise tech is booming in NY, which is a great sign for Israeli founders building enterprise software solutions (cyber, dev ops, generative AI, etc.). Dozens of NY-based VCs have already invested in Israeli startups, and many more have an interest in Israeli tech.
The NYC venture scene is hungry
For New-York techies it feels like it’s been way longer, but the New York venture scene became a significant source of deployable capital just about a decade ago. Previously, Israeli entrepreneurs had to decide between the Bay Area and Boston, but due to former New York City Mayor Michael Bloomberg’s long-term vision of making the city into a thriving tech center, New York has become the destination for global entrepreneurs.
That’s a great sign for Israeli founders as there is still a lot of dry powder in the city ready to be deployed during, (and once the recession we’re now experiencing), ends.
A strong local community, and one that can support a massive influx of Israelis ready to move to the tri-state area is a key element for founders seeking mentorship and advice. Those founders have done it before and were in the same shoes just a few years ago. Israeli founders based in NYC are extremely collaborative and helpful in providing tips, lessons learned on hiring talent, and access to investors and service providers.
We are in the midst of negotiations regarding a possible judicial reform in Israel, and we all look forward to seeing the direction the country will take. As things shape up, the momentum to relocate to NY will increase as more founders would like to take advantage of the opportunities NYC tech is offering Israeli founders during this uncertain time in Israel.