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Tel Aviv has the fifth most unicorn companies in the world. Yet, outside of Israel, relatively little has been written about the major concerns currently facing local entrepreneurs. We spoke to one of them, Avishai Ben-Tovim, CEO of MDI Health. — Anna
To SVB and back
The Exchange recently noted how Sweden performed above its weight in terms of starting dollars raised per capita. But Israel is even more remarkable when it comes to technology – so much so that it has been nicknamed the “Startup Nation”.
The Israeli tech scene is also remarkably resilient and relatively immune to the country’s global and local political woes. But in recent months, the Israeli startup ecosystem has been at the forefront of protests against the government’s highly controversial reform plan.
The reform, opponents argue, would harm Israel’s democracy and economy, in a country where the technology sector “makes up about 25 percent of Israel’s income tax and contributes about 15 percent to the country’s annual GDP.” thus The Jerusalem Post.
Driven by these political and economic concerns, major players in the Israeli startup scene publicly took a stand; Index companiese.g. sue[d] the proposed reforms in Israel that promote discrimination and threaten democracy.”
Others chose not to make official statements or formally join the strikes, leaving it to their employees. But regardless of their position, many are concerned about the economic impact this political crisis could have.
These concerns have also been translated into actions, especially in the financial field. In January, Reuters reported that that an Israeli venture capital fund and a local start-up moved their bank accounts out of Israel, and that others similarly began exploring whether funds could be held in different locations.
Avishai Ben-Tovim, CEO of MDI Health, was one of them. His health tech company, which he says has raised $26 million to date Crunchbase, is both Israeli and American. As political instability in Israel increased, it made sense to make good use of the Silicon Valley Bank account…until that didn’t happen anymore. Ironically, Ben-Tovim was in a position to rush money back to Israel before the banking entity collapsed.