Expanding from the Big Orange to the Big Apple, young Israeli companies find a welcoming ecosystem of peers, mentors and investors
“Next to Tel Aviv, New York is the second place I wouldn’t want to gossip about anyone in Hebrew,” jokes Yali Saar, the 26-year-old CEO of Tailor Brands, an online platform for creating logos, branding materials and presentations.
Saar is one of a growing number of Israeli entrepreneurs establishing a presence in Manhattan for easier access to a large pool of customers, employees, mentors and investors.
“They are coming here and finding a supportive ecosystem,” says Inbar Haham of the New York office of Magma Ventures Partners, a venture capital firm based in Tel Aviv.
“New York has always been a place for companies to raise capital, but historically there weren’t a lot of early-stage VCs. Now we see more VCs and angels expressing interest in early-stage companies,” she tells ISRAEL21c.
“Specifically for Israeli companies, the market in Israel is too small and they have to think of a global strategy. They can either go to the West Coast or to New York; New York is a better option because the time difference isn’t as big and you can take a direct flight overnight.”
Israeli Mapped in NY, created by Guy Franklin in 2013, has made it easy to see the penetration of Israeli high-tech companies in the Big Apple.
Now hosted on the made-in-Israel MapMe website for which he is chief evangelist in New York City, Israeli Mapped in NY invites Israeli startups to add a “pin” for free, pending Franklin’s approval. Currently it maps about 250 startups, four accelerators, four co-working spaces, six investment houses and one “ecosystem partner,” LeumiTech.
Directors of many of these companies – including Taboola, Datorama, Kaltura, Via, Innovid, HYPR, Vroom, WeWork, Oliver, MyCheck, CrushMobile, Cups, Tripda and SiSense — appear in a fresh new video Franklin produced, shot by an Israeli videographer hoping to make his own connections to the community.
WeWork and Taboola were among 35 Israeli companies in New York that raised a total of $1 billion between March 2014 and February 2015.
What qualifies a company to be on Israeli Mapped in NY? “If one of the founders is Israeli, then for me it’s an Israeli company,” Franklin tells ISRAEL21c.
“For example, one cofounder of WeWork grew up in Israel and in the first two years everyone treated the company as Israeli. Even though it’s now huge and global, and people don’t consider it Israeli anymore, it’s really part of the Israeli startup community in New York.”
Franklin, 39, is among several Israeli expats helping newcomers find their feet, and their community, in New York City. He moved from Tel Aviv in January 2012 to work as an accountant at Ernst & Young dealing with startups, as he had done at E&Y in Tel Aviv. Before long he noticed a trend of Israelis setting up operations in the city.
“People knew they were here but nobody unified this community and gave them a title, so I created the map to help people visualize Israeli success and innovation in New York,” says Franklin, who left E&Y to found his own startup.
“I help them connect with the community to get assistance, whether where to rent an office or where to find professional services or employees. Israeli startups raised a lot of money in 2015 and usually need to increase their staff, but they face the struggle of competing with about 4,000 other great startups in New York that are very connected with the ecosystem. I wanted to expose their place in the system.”
Accelerating and connecting Israeli startups in NYC
In late 2014, Israelis Eyal Bino, Sharon Mirsky and Arie Abecassis cofounded ICONYC Labs in Manhattan exclusively to accelerate early-stage Israeli companies.
“We realized there is a big opportunity here, especially now that New York is a great tech hub,” Bino told ISRAEL21c. “There’s a lot of curiosity about Israeli startups, but [investors] want them here to work with them.”
The program launched its first cohort in spring 2015, focusing on industries for which New York City can provide a competitive advantage.
“This includes mainstays such as ad-tech, ecommerce and financial services, as well as burgeoning areas in New York City like digital health, IoT hardware and software and even ag-tech,” Bino says.
ICONYC teaches its startups how to craft emails, pitch products and run an investor meeting in fluent English and in sync with local cultural norms, among other skills. Business and funding acceleration and operations support are provided in exchange for common equity averaging about eight percent.
Lior Vaknin, an Israeli entrepreneur living in New York City, founded Israeli Startups NYC in 2014 to create synergy between the Israeli and New York tech communities. Today the group boasts 5,000 members from both these communities, and offers an online one-day incubator and one-on-one consulting.
On March 1, Israeli Startups NYC will host its second pitch night for American and Israeli tech startups. One of those participating in last year’s inaugural event was HYPR, a hot Tel Aviv- and Manhattan-based startup in the influencer marketing space, which recently raised $5 million in seed funding.
One foot in each country
Like HYPR and Tailor Brands, many of the Israeli startups dotting the Big Apple continue to maintain headquarters in Israel.
“I see that in the last few months, every month a few Israeli companies are expanding to New York — not moving away from Israel, but expanding,” says Franklin. “I think we will see more companies raise money in 2016 and an outcome of that is expanding to New York because their market and investors are here.”
Magma Venture Partners’ Haham points out that having offices in Tel Aviv and New York gives startups an overlap in time so that somebody is nearly always “home” when customers and potential partners and investors come knocking.
Tailor Brands started out in Tel Aviv,“and after our first [funding] round we had to make a decision whether to stay or move,” says CEO Saar.
“Our investors are in Tel Aviv and New York. Israel has outstanding marketing talent and you can achieve good growth without being present in the US, but in terms of branding or the way the ecosystem views you, there is a power to being based in New York. VCs in the US prefer not to invest without a US presence, US reporters prefer writing stories about companies based here, and the sort of brand recognition B2C companies gain here is a lot stronger than what you see in Israel.”
By the end of this year, Tailor Brands expects to have 18 employees split 40/60 between Tel Aviv and Manhattan. “It’s important for us to keep an Israeli presence going,” says Saar, who flies back and forth every two months.
Saar gives credit to Franklin and others for helping to make such a vibrant Israeli startup community in New York. “There are many activities to bring people together, and we help each other.”
Franklin also created Israeli Mapped in Boston, currently showing about 100 startups, and the Israeli Executives and Founders Forum has a map of about 100 Israeli companies in California.
“The next will be London, because there are many Israeli companies moving there as well,” Franklin reveals.
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