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When it comes to startup havens, Silicon Valley is top of mind. The offshoot of the San Francisco Bay Area is known worldwide for its massive cluster of tech firms worth billions of dollars.<\/p>\n
But, in the realm of construction innovation, there\u2019s another area of the world where burgeoning technology firms can find support and funding: Israel.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n The country is one of the most promising startup ecosystems in the world\u2014 it\u2019s the third highest ranked country in the world for startup activity, behind only the United States and the United Kingdom, <\/span><\/span><\/span><\/span><\/span><\/span>per Israeli research firm StartupBlink<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Budding entrepreneurs in Israel who seek to build their own businesses enjoy strong support systems, government funding and access to investors, who see the value the country brings in the startup scene. However, Israel\u2019s strengths wane as these businesses seek to expand beyond the country\u2019s borders, leaving them to go elsewhere to grow further.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Construction Dive spoke to several startup executives and experts, who all praised the country\u2019s development ecosystem and attention that budding entrepreneurs receive. They also listed the unique challenges businesses face there.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Creating startups from scratch and building a business from nothing is in \u201cthe DNA of Israelis,\u201d said Meirav Oren, the CEO and co-founder of construction technology firm Versatile, which started in Tel Aviv.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cIt’s such a fertile ground for an industry that needs great solutions and great companies to be created,\u201d said Oren, who is also the chair of the Tel Aviv chapter of the Society for Construction Solutions, an organization focused on the future of the industry.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n CraneView, one of Versatile\u2019s products.<\/p>\n Permission granted by Versatile<\/p>\n \u00a0<\/p>\n<\/figcaption><\/figure>\n Aviv Leibovici, co-founder and chief product officer of Tel Aviv-based construction software firm Buildots, credited the Israeli military for its role in giving business people the skills they need to succeed in a startup environment.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Many Israelis \u2014 barring exceptions based on race, religion or health \u2014 are required by law to serve in the country\u2019s military:\u00a0Men are required to serve for 32 months, while women are required to serve for 24 months. Among the most famous of these programs is Unit 8200, an elite cybersecurity section within the Israeli Defense Force that Forbes called \u201c<\/span><\/span><\/span><\/span><\/span><\/span>Israel\u2019s secret startup machine<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n For Leibovici, making connections within the construction industry was a large, but surmountable, task. He believes it was easier to accomplish in Israel, as opposed to Britain, where Leibovici is currently based, away from the Tel Aviv headquarters where Buildots was founded in 2018.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cIsrael is such a closed, small sort of community in many ways that you may easily get to, to explore,\u201d Leibovici said. \u201cPeople tell you, \u2018Oh, you’re trying to start a tech company in this space? That\u2019s fantastic, that\u2019s amazing, come in.\u2019\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Leibovici said that because of those connections, he was able to get a strong understanding of the market very quickly, through meetings with CEOs and days on site with project teams, finding the ins and outs of the industry.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Cheli Wasserman, the CEO of Bimmatch, a construction software firm based in Tel Aviv, echoed Leibovici\u2019s sentiments.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cIsrael enjoys a thriving startup ecosystem support, with a high concentration of tech companies and a culture of innovation that provides valuable and supportive networking opportunities for legal, business and development inquiries,\u201d Wasserman said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Those doing business in Israel say they reap benefits from the role of the government in creating opportunity and the involvement of others within the tech arena that supports entrepreneurs.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cSomeone knows someone all the time, and they’re able to give you that intro a lot of the time more than you’re going to find in other places,\u201d said Molly Livingstone, the chief of connections and ecosystem manager for MassChallenge Israel, an offshoot of Boston-based American startup accelerator MassChallenge.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Livingstone pointed to specific programs the government of Israel has engineered to grow startups, such as the Israel Innovation Authority. The IIA, by acting alone or partnering with other countries such as Japan, the U.S. and India, as seen on its <\/span><\/span><\/span><\/span><\/span><\/span>request for proposals page<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>, can provide funding and support for Israel-based companies looking to break into the fields of their choice.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n The IIA has an annual budget of roughly $500 million, according to Hagit Sela-Lidor, the IIA\u2019s head of international marketing. After what Sela-Lidor called a rigorous screening process, startups can receive a large percentage of the funding they ask for. According to the agency\u2019s 2023 annual <\/span><\/span><\/span><\/span><\/span><\/span>report on the state of high-tech in Israel<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>, the agency spent around 1.7 billion Israeli shekels, or around $449 million, in direct funding across its plethora of grant programs for startups and businesses.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n However, the government won\u2019t solve all funding woes.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cIf you’re asking for $100,000, you will never get the full amount of the money. You\u2019ll get, at the maximum, up to 85%. And the rest has to come from private funding. In that way, we engage the private sector to jump on the ship with us,\u201d Sela-Lidor said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Despite government aid, this figure pales in comparison to the private sector, which is a large part of the equation \u2014 in just the first six months of 2023, the <\/span><\/span><\/span><\/span><\/span><\/span>Times of Israel reported<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> that startups raised $3.9 billion from private financing rounds. This large figure is also a 29% drop from the second half of 2022, per the Times.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Networking sometimes occurs even before a business is founded. Sources pointed to the Israel Institute of Technology, or the Technion, a university with a reputation rivaling the Massachusetts Institute of Technology, as a large foundation for entrepreneurs.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cIsrael is a very active ecosystem,\u201d said Gonzalo Galindo, the president of Cemex Ventures, the venture capital arm of Mexican contractor Cemex. \u201cWe have traditionally seen quite a few companies from Israel in our startup competition that we run every year.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\nConnectivity is key<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n
It\u2019s all about the money<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n