Israel's Startup Community Ready to Shine After Google-Waze Deal

In the wake of Google's acquisition of Waze, Israeli startups are in the spotlight.

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While Silicon Valley is the global leader when it comes to startups, 'Silicon Wadi' is nipping at its heels.

Highlighted by Google's recent acquisition of Waze, a real-time navigation and mapping service, the spotlight is on Israeli startups, buoyed by a community with an influx of cash and a youthful creative spirit flowing through its entrepreneurs.

[READ: Google Acquires Waze to Help Improve Its Maps]

The country has a long history of being a breeding ground for innovation. During the dot-com bubble at the turn of the century, Israeli computer engineers invented or refined several pieces of technology that are now commonplace, including flash drives and instant messaging. Hordes of cash followed these discoveries, including Lucent Technologies buying Chromatis Networks, a fiber-optic network management company, for $4.7 billion in 2000.

While Microsoft, Google and Intel all presently have major business hubs in Israel, money is being injected into Israel's startup community by venture capitalists. Last year, Startup Genome, a data project that ranks the world's top startup ecosystems, ranked Tel Aviv second in the world, only behind Silicon Valley.

Funds have been flowing into Israeli startups even before the Startup Genome project announced its findings. As Bloomberg reported earlier this year, venture capitalists invested $899.2 million in Israeli companies last year, a 41 percent increase from the previous year, according to the National Venture Capital Association.

While the money is continually rolling into what has become known as "Startup Nation," Roi Carthy, managing partner of Initial Capital, an early stage investment firm based in Israel, says the community's success goes beyond a stack of blank checks.

"What I believe sets us second only to [Silicon Valley] are our risk-taking, no shame in failure, along with having 30 years of [high-tech] experience behind us," Carthy says. "No shortcuts when it comes to culture and experience."

[ALSO: Google's Acquisition of Waze Brings Out Anti-Trust Critics]

Guy Michlin, founder of EatWith, a startup that allows people to dine in homes around the world, says the local community was paramount to his company's success.

"There is a very supportive startup culture and we were able to get advice from practically all the entrepreneurs who had relevant experience to ours and whom we approached," he says.

With over 4,800 startups making up the Israeli community, Michlin says it won't be long until another deal similar to Google's Waze acquisition is announced.

"At the end of the day, to have a vibrant startup community, you need talent, resources and success stories," he says. "In the 90's, it was ICQ & Checkpoint that sparked the imagination of many young entrepreneurs and the Waze story will definitely fuel a new wave of entrepreneurs, encouraged to follow their dreams."

Here are some other Israeli startups that could be seeing a big payday in the near future:


The website design and platform company boasts over 35 million websites, rolling out HTML5 and an app store for people who use its products last year. Created in 2006, the company filed for an IPO in the U.S. earlier this month, becoming the first Israeli tech company to do so this year.


Rivaling Wix as one of Israel's biggest Internet companies, Conduit makes web and mobile engagement tools for a variety of companies from Time Warner Cable to Travelocity. The company counts more than 250 million users in 120 countries and was measured to be worth $1.5 billion in its last valuation.


A new social fashion app on Facebook, Wishi (Wear It Share it) allows users to create a personal closet online, browse through other users' wardrobe and sell pieces to other users.

Currently in beta, Wishi received a new round of seed funding from Jerusalem Venture Partners last October.


The concept for EatWith can best be described as Airbnb for food, but instead of restaurants, users invite people into their homes. Started in 2012, the company has outposts in Israel and Spain, with launches in 10 more countries – including the U.S.and Brazil – scheduled before the end of 2013.

Corrected 06/28/13: A previous version of this story erroneously described BillGuard's pricing structure.