Israeli start ups – the next generation

Last week, I wrote about the success that Israeli companies have enjoyed in launching their apps on the global market. In parallel, at the end of this month, Israel will have the fourth largest delegation at the annual Mobile World Congress in Barcelona.

When the Israeli economy effectively shut down in 1986, it was known for trading in polished diamonds, arms and Jaffa oranges. The last two are still dominant, but number three on the list is now hightech – in all its forms and with great gusto.

Apps and mobiles are just one part of the new economy. Exits and FDI in 2011 did keep moving ahead. The continuous move of multinationals to set up r&d centres in the Holyland is another part of the puzzle. (For example, check out the Facebook event in Tel Aviv, scheduled for March 2012).  However, my point is that there is something else going on.

Israel has a culture that drives initiatives forward from the ground upwards. For example, this weekend, the newspaper “The Calcalist” – Hebrew for the word economist – featured seven new companies in the field of cloud computing.

By definition, these companies have barely been around for more than 24 months. With names like Cloudyn, Dome9 and 6Scan, they have an average of 10 workers. And they have all already brought in their first million dollars in venture capital – in one instance, US$11 million.

Biotech can boast a similar story.Consider BioInvest Israel, which  will open its doors again in Haifa. Investment groups are due from Italy, Poland, Japan and the USA to name a few. Why?

Well, take a company like Marx Biotechnology Ltd, which I have been concerned with for some time. Within a year, their small team of biologists have achieved POC to develop a diagnostic kit for the detection of the early stage of Graft Versus Host Disease. (Experts had said that it could take a decade just to reach this point.)

If Marx Biotech is successful, not only will tens of thousands of lives be saved every year. The kit will allow for a vastly extended use of stem cell treatment. It will be a test of the company’s skills to reach market in the predicted 24 months.

I can discuss similar examples in the field of Cleantech, and not just the usual set of wind or solar stories. Telecomm, Nanodiamonds, Security and more have all come my way in recent months – all stories where one or two individuals had a spark and ‘went for it’, triumphantly.

Slowdown or not, 2012 will be another fascinating year for the Israeli economy, challenging the boundaries of the accepted.

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