It has been “common knowledge” in the Israeli tech ecosystem that given Israel’s size, population, and geo-political isolation from its neighbors it’s never been a real market. When it comes to cybersecurity or enterprise software solutions the sky's the limit, and selling to markets such as the United States, Brazil, or China has been the key to many Israeli startups’ success. With the growth of the Startup Nation the country has created a new crop of newly minted millionaires, but it’s not just the investors and founders of successful startups who are benefiting. It is also the employees of high paying jobs in tech who have seen their salaries increase and lifestyles improve. Many Israeli millennials are enjoying lifestyles like their counterparts in places such as the United States and Western Europe. With that increase in salary and consumerist focused lifestyles several industries have begun focusing on Israel not just for innovation but as a market.
The first thing one notices when they arrive in Tel Aviv are the number of scooters, electric bikes, and all sorts of electric transportation vehicles. There are so many of these vehicles whizzing by that there are dedicated lanes for electric vehicles. Bird, Lime, Wind, and every other scooter company interested in mobility and transportation have flocked to Israel to tap this market.
Israel is a country of necessity and given the dense urban environment of so much of the center of the country adding additional cars has not been an option. Israelis have wholeheartedly embraced these new forms of transportation. In fact, Tel Aviv was one of the first global cities that scooter startup darling Bird chose to expand outside of the United States.
Amazon Strikes Back
After failing in China and India Amazon still has global aspirations. Amazon has been active in Israel with the company’s R&D as well as selling AWS services to the Startup Nation’s many startups. Amazon has had moderate success in places like Germany and wants to bring the concept of Prime shipping to Israel. The company is a data-driven organization, and its founder and CEO Jeff Bezos is known for making decisions after referring to clear data points. With an increased standard of living and more disposable income Israeli shoppers are next to embrace Amazon Prime.
There has been the concern that with Amazon entering the Israeli market many local businesses will suffer. And while it is true that certain industries in the United States such as fashion and retail have been hit hard by e-commerce in the end these industries have been able to adapt with the times by changing and improving their business models.
Newly minted millionaires
Asset management firms focused on high net worth and super high net worth individuals and families have begun to look to Israel as a source of new clients. Technology has created new winners in the millionaire lottery. While nothing in comparison to the extreme amount of wealth generated in the Bay Area, Israel is starting to become a place where millionaires reside. There seems to be no sign of this trend stopping soon as money continues to pour into Israel and the many startups the country generates. Well known and reputable asset managers such as Credit Suisse and Schroders have opened up offices in Israel, and as the exits continue, we’ll see this industry grow.
Just a few years ago it would be ridiculous to consider Israel anything but a test market for a new product. While the Startup Nation’s main strength is still creating innovations for the world it has also become a market for those brands and industries looking to engage the new generation made wealthy by Israel’s technology.