Nachum Segal and Yariv Becher of Startup Nation Central on Israel's Tech Industry in 2025 and Today

We have a special guest with us live via telephone from Israel. Yarif Becker who's vice president at Startup Nation Central is with us live on this Wednesday morning. Many of you may have seen that uh there was a press release that came out. Startup Nation Central, a notfor-profit promoting the Israeli innovation ecosystem around the world, has released early numbers for its 2025 annual report, offering an early view into how Israel's tech ecosystem evolved over the past year. And um the headline is that Israeli tech rebounds with over 15.5 billion dollars in funding and a record 74 billion in M&A as investors pivot to scale. I already told Yariv over the telephone that he shouldn't expect I know what any of these terms mean. And uh early estimates from startup nation central annual report shows a $10 million median deal size as mega rounds capture around 50% of total capital signaling a transition from rapid growth to high conviction scale. And there you have the headline and part of the story. Vice President, Startup Nation Central, Yariv Becker, a pleasure to welcome you to JM in the AM. >> Thank you, Malcolm. Good morning. >> What were the expectations? By the way, you know, it's funny. When I was in history class as a kid, I was always told that war helps the economy and of course there were a million theories why, etc., etc. But, you know, Israel is a small country. So many of the innovators had to be actually in the army, some of them for hundreds of days over two years. What was the expectation? I don't know, 18 months ago, 24 months ago, did it seem like the the entire industry could really suffer because of the practical situation Israel was in? >> So, you know, October 7th was an unprecedented event. And when we we woke up on October 7th, you know, to a personal tragedy and a national one and then on October 8th, which is a Sunday, we work in Israel, >> right? we uh had our management meeting on Zoom and uh of course first of all check that everyone is doing okay and who was drafted and and everything and then we said okay we understand this is going to affect uh the industry. >> So we did a number of things one of them was to go back and we have by the way our report is based on the startup nation finder which is a digital platform that encompasses all the activity in the ecosystem. So we are a data data-driven organization and we have a finger on the pulse and we went back to see the data from previous uh violent cycles and we saw and and we actually came out with with a slogan with a campaign basically that Israel tech delivers no matter what and we saw that in the the previous cycle 2014 which was the biggest one uh protective edge a lot of the companies that were established around that time either a bit before or after one some of the leading unicorns today. So we we came out with that promise >> and and and I'm sorry for I'm sorry for interrupting but I mean you know protective edge was so much more of a shorter period of time and I would assume likely did not take the manpower that this two-year war took. Is it really a good comparison? >> No. So that was the the the only benchmark that we had and we understood that of course this event is in a much larger scale and the effect that it has and and rightfully so as you mentioned about 20% of the tech workforce was drafted right >> um but but we know the the character and um you know the resiliencess of of the industry and we came out with that promise and then you know at the end of 2024 we saw that actually the the industry delivered on that promise as we said uh is tech delivers no matter what and actually what we see when we look at the data is that there's much more correlation between performance of the industry in Israel and the US tech industry then the then it is affected by what is happening here in our region and that was true at the end of 2024 and even more so at the end of 2025 >> so so the the question is why I mean the question is why I'm assuming it means means that investors from around the world, specifically the US, I assume is what you're saying, you know, took a great interest in in in seeing the tech industry in Israel as a as a major opportunity. Why didn't they shy away? Why they think that there was so much potential for success? >> So, I think there are a number of reasons. Uh first of all, probably really the most important one is is really that uh characteristic of uh of Israel. And and by the way, the second thing that we did on October 8th is we opened a hotline and we told startups, if you are encountering any problems, deals being cancelled, um uh investments being withdrawn, let us know. We got about 500 uh companies that approached us with different things and we uh assigned uh case managers to each company. We have photos of our team members having Zoom meetings with CEOs, CTO's, VPs of startups in uniform in the field. You see a tank. >> It's unbelievable. >> Unbelievable. >> And then with the laptop that that's that's the character. >> I mean, I I remember I remember I don't remember exactly who it was, but I and it may have been a connection from your group. I remember we actually spoke to a soldier up north. I think it was an officer who, as you just described, was running his brand new company from his laptop on the front lines. And I was wondering what kind of exception that was. But you would say that that was more common than not, right? >> It it was very common. Yes. Unbelievable. That again that's the characteristic. But but the other things are first of all a lot of the tech in Israel is software. It's less affected by don't have manufacturing facilities. I mean we have a few but not uh all the industry. >> Um demand wasn't wasn't affected. Demand was global. it wasn't affected by the war. So if we're able to deliver then uh then there is demand and and business grows. Um and also the experience that uh not just we globally we had with covid >> is uh you know how to manage and people can work remotely and uh in different hours and yeah so a number of uh factors that come together. I never even thought of that how the co experience was really a blessing uh to have had before this war for the reason you just mentioned that's a really interesting twist to the whole situation especially for those of us who resent the whole co experience every time we think about it yiv becker is with us vice president at startup nation central so has the I mean you mentioned obviously you know software a big part of it I if we would have spoken 3 four years ago would it have been the same like percentage-wise uh the Israeli tech industry or the Israeli startup industry, is it basically divided up in in sectors and industries that generally have been the case over the last 5 years or the war or whatever has happened in 2025 and 2026 has really changed that landscape. >> Uh it hasn't changed uh dramatically. Um first of all it's very important to say people tend to think when when they think of Israeli tech uh mainly cyber some think uh defense of course there's a lot of uh activity in cyber uh and defense tech is a growing uh sector but actually the leading sector in number of companies is health about 20% of the startups in Israel are healthcare uh related then uh >> can you give me can you give me an example of a company that's a startup and and a product that they have or a method they have that's going to be revolutionary. Is there something that came across your desk in the last year that you remember specifically in the healthcare industry? >> So I I I always shy away from um saying one company because you know the we represent the ecosystem as a whole. What I do want to say is that the connectivity what we're seeing just to give you an example >> right >> of um of the connectivity between the tech industry and by the way military uh and defense related uh capabilities is there are a number of startups that use um systems to that in the army you would use to analyze aerial shots and aerial uh photos and they implement that in um deciphering MLIS CAT scans. Um that >> it's a good example. That's a good example. >> Show the >> Yeah. >> Uh it really goes to show the example and um the connectivity as I said that we have between different capabilities and that that are relevant for one solution and that you can peer them to another. >> No doubt it'll lead to better healthcare and revolutions in terms of early detection etc etc. I just read an article over the weekend about an early detection system for um for um oh I can't believe I forgot the name. um uh pancreatic for pancreatic cancer which has been one of the great mysteries unfortunately because there are no really good tests to get it early and now of course that is being reversed uh because excuse me a technology has been developed that will give doctors opportunity to go ahead and do a certain scan a certain test and actually hopefully come out with um a very early detection in a case like that and those of us who know people who have been in that situation we know how difficult that cancer is. Yaniv Yariv Beha rather is with us live via telephone vice president at startup nation central. So what do you say this does to the whole Israeli economy? You know again 2023 happens many people especially on this side of the world you know are wondering if this will collapse the entire Israeli economy. Everybody had their own theories and one of the things we keep emphasizing here is the percentages that the Israeli economy has grown over the last two years. So is this all techreated? Like without this sector, would Israel be enjoying this type of solid economy the way it is right now? >> The Texas sector has uh for the last 30 years been a major driver for economic growth and prosperity in Israel. Yeah, >> it accounts for around 20% of the GDP. Um, by the way, it employs about 12% of the workforce in Israel and over 50% of exports and over 30% of um of tax revenues uh that the government collects. So definitely a major driver, not the only one. We do see other sectors in the economy and my organization is focused on on on tech uh and that is what I can probably dive into more but when we look at other sectors you can see first of all that the stock exchange in Israel is doing amazing right >> uh the shekel is quite strong >> other sectors like um construction and and housing have been affected uh you did see that but uh it's compensated >> and that and that's because and that's because of lack of that's because of lack of workers or or other um uh logistical problems. >> Lack of workers has definitely affected uh the the rate and pace of uh building and uh investments in real estate have gone down. >> Interesting. So it's a good time to buy, huh? >> It's a good time. Yeah. If anyone wants to to buy a second home in Israel, now's the time. >> Yeah, you could say that again. By the way, how does it work, Yariv? I don't know, young soldier in the Israeli army who now has, you know, certain experiences and says, I could do this better. I could invent something to help the army or help society or help medical sector, whatever it is. What's their first step? Like where do you go with that idea? How do you become part of, you know, startup nation central in terms of trying to direct your efforts the right way if you do have a really good idea and you think you can get the funding for it? >> Yeah. So one of the things that I think is uh very uh important to understand about Israel is we have a very developed ecosystem. It's not just the technology companies. There are other organizations like the innovation authority in Israel, different acceleration programs, uh incubators, a lot of active investors that uh that are very important and of course also the multinational corporations that are in Israel. So >> um by the way just to give you um a bit of an explanation about what we do at Startup Nation central. So I said we have our finder platform but also we work globally. We help the ecosystem here or rather we help the world connect with the ecosystem. We work with multinationals with investors with governments to help them find the right opportunities. If you're uh an entrepreneur that has an idea, there is the innovation authority that would provide you with uh with funding. There are acceleration programs. We help them also connect with with the right people. There are uh investors in Israel at every stage from early stage investments to later stage that you can that can provide you funding. The ecosystem as I said is very very developing. I can give you an example. I just came this morning from a demo day uh that the um uh the Israel uh aerospace industries is uh is doing an accelerator for defense related uh solutions. And half of the presenters are people that came and they started their pitch. They said I I I've been serving in u military reserve for the past uh two years. I did over 40 uh 400 days. I I saw a need, something that needs to be addressed. I have this idea and and then they give you a pitch of the technology that they're developing to solve a challenge that the military has and uh I Israel's uh aerospace industry is is supporting them. >> How many presentations do you see on a day like today? >> Uh today in this program there were seven. >> Interesting. But at on any given day around Tel Aviv and even uh outside there are many such events. >> Do major companies around the world ever consult with you about you know their their desire to be in Israel? I mean Amazon's a terrible example because they could do whatever they want on their own. But I was told by somebody that if you name a major company that you know especially the ones based in the US they they likely have offices in Israel. Do you ever are you ever involved or ever uh you know a consultant uh when a when a company that's somewhere else around the world wants to expand into Israel? >> That is our uh day job bread and butter. uh as I'm speaking with you now in the conference room in front of me there is the largest energy company in Germany that has a presence in Israel but uh their head of innovation that actually sits in London is visiting Israel and he wanted to meet with startups and we set up a full day for him to meet with energy related uh companies. >> Do they have do they have a presence they have a presence in the US? Uh no it's a it's a European uh company but so what I wanted to say there are over or close to 450 multinational corporations that have innovation activity in Israel there is no other place in the world where you have so many foreign companies that have innovation activity in one place it and we don't count sales and marketing call centers back office innovation activity from uh what we call a technology scouter a person that's looking for inov innovation through an investment arm or a full-fledged R&D center like Amazon has in Israel or Apple or or Google. Um they they have activity here and they still they work with us to find innovation and there are many more that that come from abroad and uh and don't have access in Israel and when they want to navigate the ecosystem and find the opportunities we help them do that. I I mean did these did these heads of government in Europe, for instance, you just said Germany. Do they understand the importance of Israel, you know, for their own companies and their own efforts? For that alone, they should be supporting Israel and trying their hardest to, you know, keep Israel strong. Sometimes they come out with statements that seem that they're anti-Israel. uh I think there is a disconnect between the economic uh the understanding that they have of their economic interest and what they do and the political sphere and there's a tension there. Uh but we have we host here um ministers of uh of economy and innovation in our building and they want to come and understand first of all they want to learn about the Israeli story and experience and some of them want to to emulate it and uh and they understand the benefits of engaging with Israel and with the innovation activity here and how that could help them grow and develop their economy as well. You have any clue how many Amazon employees are in Israel? I'm just curious like is there do you have a guess even like how many people in Israel Amazon employees? >> Uh not off the top of my head but I would say around probably a thousand or even more. >> Oh, so it's not 10 20,000. It's somewhere it's somewhere in the thousands. >> Yeah. Well, you know, Israel is 10 million people. >> No, no, this is not a complaint. I'm just curious. I'm trying to get a perspective, that's all. By the way, for those of you who uh who want to know um about um Yarim's um comment about the shekel, $1 is now 317. And boy, for those of us who remember numbers way higher than I I don't remember it lower than this 317, frankly. I mean, I don't follow this every day, but that's pretty strong, right? No, I I I remember when it was your work, but that was like I don't know 35 years ago, >> right? No, I get that. >> Yeah. >> But it's amazing how strong it is. >> Let me give you just one uh one other anecdote since I think it's very interesting when we're talking about these global companies. So uh you know today um Nvidia is probably one of the most important companies and one of most uh and probably the most um important technology revolution and most most impactful right the the AI >> big big presence in Israel >> in Libya about 15% of their workforce is employed in Israel. Wow, that's unbelievable. >> 15%. >> And is that in is that in Tel Aviv? Are their headquarters in Tel Aviv? >> So they have also um basically it's a it's an acquisition that they did a few years ago which is based in Yokam up north close to >> Wow. >> And they just came out with an announcement that they are going to double the number of their employees in Israel and they're going to open a big R&D campus up north as well. Um, so >> unbelievable. The whole thing is unbelievable. I I look, I don't know how spiritual a person you are, but it's hard for me to hear all this news and not think of the uh incredible um uh uh uh hashka, if you will, of the one above to uh to oversee a state of Israel that is now so strong the way you've described it this morning. >> I I agree with you. I think that also requires people to to take action and to fulfill the opportunity to fulfill the opportunity that God provides. >> Yeah, 100%. Uh pretty amazing conversation, Yariv. I appreciate it. Yariv Becker, vice president, Startup Nation Central Tadar Dasham. Thanks so much for joining us this morning. >> Thank you very much. >> More coming up. You're listening to a uh what is today? Wednesday morning edition of JM in the A.M.