In the beginning in1948, there was adversity and few resources to deal with it. Now Israel is firmly on the map. Those who have read the book Start-Up Nation (by Dan Senor and Saul Singer, 2011) know why.  Here’s how Amazon puts it:

Start-Up Nation addresses the trillion dollar question: How is it that Israel – a country ….surrounded by enemies, in a constant state of war since its founding, with no natural resources – produces more start-up companies than large, peaceful, and stable nations like Japan, China, India, Korea, Canada and the UK?…

The cover explains: “While Americans emphasize decorum and exhaustive preparation, Israelis put chutzpah first.” The book goes on to explain that the innovative Israeli spirit is because the IDF teaches Israelis to improvise and get things done.

However, the results don’t happen immediately and around 90% of start-ups don’t succeed at all. But in Israel, so long as you learn from your failures, you can bounce back.

R&D Spending:

Israel ranks number one in gross domestic spending on R&D according to the OECD.

Here’s the latest OECD league table, showing R&D spending as a percentage of GDP in 2023:

Israel 6.35%, Korea 4.96%, Taiwan 3.98%, USA 3.45%, Sweden 3.6%, Japan 3.44%Belgium 3.32%, Switzerland 3.3%, Austria 3.29%, Germany 3.11%, Finland 3.09%, UK 2.8%, Denmark 2.99%, OECD average 2.7%, China 2.58%,  Netherlands 2.23%, France 2.19%, EU Average 2.13%, Singapore 1.85%, Estonia 1.84%, Canada  1.81%,  Australia 1.66%, Ireland 1.58%, Turkiye 1.42%, Italy 1.31%, South Africa 0.61%.  (See https://www.oecd.org/en/data/datasets/main-science-and-technology-indicators.html)

What is the typical investment size for startups in Israel?

Angel investors typically invest $50,000 – $1 million for early-stage startups. Venture capital (VC) funds typically invest in Series A to Series C rounds, $1 million – $100 million. There are also R&D funding programs (typically 50%) from the Israel Innovation Authority (IIA) and various international arrangements Israel is party to,

Israel is also home to more than 500 R&D centers of some of the world’s largest multinational corporations, such as Microsoft, Apple and Google.

VC funds, business incubators and business accelerators have brought a high degree of financial discipline to start-up techies fresh out the IDF.

Tax breaks also help preferred tech enterprises, angel investors and employees in approved share/option plans (ESOPs).

Success Stories:

We cannot list all the successful Israeli start-ups. But here is a list of the 15 biggest acquisitions in Israeli history (thanks to Brian Blum and Yulia Karra of Israel21C  https://www.israel21c.org/the-15-biggest-acquisitions-in-israeli-history/):

1. Wiz:$32 billion, purchased by Google in 2025. Provides cloud security;
2. Mobileye: $15.3 billion, purchased by Intel in 2017. Developing sophisticated technology to power tomorrow’s autonomous vehicles.
3. Frutarom: $7 billion, purchased by International Flavors & Fragrances (IFF) in 2018. Food flavorings maker.
4. NDS: $5 billion, 2012 . Software and hardware (such as secure set-top boxes) for pay TV providers.
5. Chromatis: $4.7 billion, purchased by Lucent in 2000. Supplied products which alleviated bottlenecks in the “last mile” of networks connecting telephone exchanges and customers.
6. Mercury Interactive: $4.5 billion, purchased by HP in 2006. Makes software for application delivery and management, change and configuration services, quality assurance and IT governance.
7. Playtika: $4.4 billion, purchased by Interactive Entertainment in 2011. Makes online casino games.
8. Orbotech: $3.4 billion, purchased by KLA-Tencor in 2018. Helps to build the printed circuit boards, flat panel displays and electro-mechanical systems consumers rely on today.
9. SodaStream: $3.2 billion, purchased by PepsiCo in 2018. Carbonated beverage manufacturer.
10. Imperva: $2.1 billion, purchased by private equity firm Thomas Bravo in 2018. makes a suite of products to help organizations protect customers from cyberattacks.
11. Mazor Robotics: $1.64 billion, purchased by Medtronic in 2018. Supplies robotic guidance system that improves outcomes in spine and brain surgery.
12. M-Systems: $1.5 billion, purchased by Sandisk in 2006. Invented the concept of a small, portable memory (USB) stick (“DiskOnKey”).
13. Waze: $1.1 billion, purchased by Google in 2013. Real-time updated traffic maps and turn-by-turn directions.
14. Neuroderm: $1.1 billion, purchased by  pharmaceutical giant Mitsubishi Tanabe Pharma in 2017. Treatment for Parkinson’s disease.
15. Trusteer: $1 billion, acquired by IBM in 2013. Makes products that block online threats from malware and phishing attack.

Bonus — Mirabilis $287 million:  purchased by AOL in 1998. The company behind ICQ, in many ways kickstarted the Startup Nation. Long before WhatsApp and Facebook Messenger came to dominate the messaging scene, Mirabilis developed one of the first Internet chat products.

Also – Warren Buffet’s Berkshire Hathaway purchased 80% of Iscar, a maker of cutting tools for $4bn in 2006 and the remaining 20% for $2.05bn in 2013.

To sum up, there’s hope yet for Israel…..

Next steps:

1. We have much experience of M&A deals, including three of the above. Please contact us if you have an M&A in mind.
2. Consult experienced professional advisors in each country at an early stage in specific cases.

[email protected]

© Leon Harris, April 30, 2025