Start Up Nation Central's "Finder" revealed that Jerusalem may be the new capital of the "start-up nation," thanks to its growing technology ecosystem, which includes 405 companies, 22 exits and total investments worth $1.6B, of which $233.5M are from the past year.
Data also shows 166% increase in the field of artificial intelligence.
The most prominent sector in the city's tech landscape is bio-tech and life science which provides a range of innovative solutions for COVID-19.
Alongside its rich history and culture, Jerusalem has evolved in recent years and became a magnet for entrepreneurial activity and cutting-edge innovation. This has become even more prevalent in the role the Jerusalem ecosystem is playing in the global fight against COVID-19, particularity in the fields of bio-tech and life science/medical innovation. On the eve of this year's celebrations, marking 53 years since the city's reunification, Start-Up Nation Central, in partnership with the Jerusalem Development Authority, the Ministry for Jerusalem and the Jerusalem Institute for Policy Research, shared insights and data about the unique technological ecosystem which came about in the capital of Israel.
According to Start Up Nation Central's Finder, the Israeli innovation tracking platform, there are currently 405 active companies in the Jerusalem Ecosystem, a 102% growth since 2012. In 2019 alone, $233.5M were invested in Jerusalem-based companies and start-ups, a 21% increase from the year prior. The city prides itself on 22 tech exits and total investments worth $1.6B.
Israel’s largest tech exit in history was Intel’s acquisition of the Jerusalem-based company Mobileye for $15B, and this year another Jerusalem company, Lightricks, had a one-billion-dollar valuation, officially becoming a "unicorn." Eighty-six percent of the companies offer B2B products, and most companies are considered "small-medium" with 92% of them having under 50 employees. Fifty-four of the companies have already released products.
"Jerusalem's tech sector has not only grown dramatically in the past eight years but can serve as a model for an emerging global tech hub," said Wendy Singer, Executive Director at Start-Up Nation Central. "Producing some of Israel's standout unicorns has been Jerusalem's calling card. This proves there are ecosystems developed outside of Israel’s center that can prosper, and function - and be part of the economic growth in Israel's periphery."
Out of the 405 companies, two fields of expertise are more prominent than others – life sciences and artificial intelligence.
The Startup Genome Ecosystem Report for 2019 ranked Jerusalem 8th in the world in number of companies in this field (together with Tel Aviv). In fact, 33% of high-tech companies in Jerusalem are within the life sciences category, a total of 130 companies (around 44 of which are in digital health, 41 in medical devices and 38 in pharma).
The ecosystem's reaction to COVID-19 perfectly embodies the strength and abilities of the Jerusalem tech sector – as the local ecosystem (medical centers, universities, and Startups alike) mobilized itself towards developing solutions for the various aspects of the pandemic.
Several companies in the local ecosystem had solutions already at hand even before the virus' outbreak, and many others joined the global effort in converting their technologies to better suit the current crisis like EyeControl which developed a ventilator tubing that prevents the development of respiratory bacteria, or uLabs which uses ultrasound technology to identify and detect COVID-19.
Current research at universities is also very significant – the Hebrew University focused on the virus characteristics, possible early detection techniques, and more. By the end of April 2020, Yissum (The Hebrew University Technology Transfer Company) has made 33 pandemic related technologies available for licensing.
"During COVID-19 the sheer amount of Corona Tech solutions coming out of Jerusalem further embedded the global standing of the city's Bio-Tech sector," Singer added. "If you layer the strength of the city's life sciences ecosystem over Israeli's relentless problem-solving gene, it's not hard to imagine that technologies born here are going to be picked up elsewhere."
Artificial Intelligence is one another prominent growing sector in Jerusalem. Over the past five-years, the number of companies developing AI technologies has grown from 30 companies to 80, a staggering 166% increase. In 2019, over 60% of the revealed investments in the city were in companies developing products or technologies using Artificial Intelligence and Machine Learning.