BusinessIsrael’s venture slowdown lags due to ecosystem’s founder mentality

Israel’s venture slowdown lags due to ecosystem’s founder mentality

While the impact of macro market conditions on the global venture ecosystem has dominated headlines and conversations since February, it occurred to me a few weeks ago that I hadn’t heard anything about Israel. No huge layoff perils — but no eye-popping mega-rounds either. Was no news good news? I decided to find out.

In the first half of 2022, more than $9.1 billion was invested into startups in Israel, according to the IVC Research Center. This marks a notable drop from the $12.4 billion invested in H2 2021, and it’s also a 17% decline from H1 2021.

At the same time, though, the country minted 20 new unicorns, which is down from 26 in H1 2021 but up from 16 in H2 2021. Plus, according to layoff tracking site Layoffs.fyi, there have only been 17 reported instances of startup layoffs this year.

So while the venture scene in Israel mirrors the same funding pullback as other geographies, it seems to be doing so with fewer negative outcomes. I spoke with a few investors on the ground to find the root of this disconnect, and they described a startup culture that’s vastly different from that of the U.S. — meaning the numbers make sense.

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