Investment in Israeli technology startups plummeted in the first half of 2023, an Israeli tech industry monitor said Tuesday, citing the government’s divisive judicial overhaul plan as a main driver of the downturn.
Start-Up Nation Central, a nonprofit organization that tracks and engages with Israel’s technology industry, said that it had seen a 29% decrease in private funding in Israeli tech in the first half of 2023 compared to the second half of 2022, and a steep drop in investor participation. Initial public offerings and mergers and acquisitions also hit a five-year low, it said.
The organization said that uncertainty in Israel because of the judicial overhaul “is already being felt with indicators such as decreased fundraising and fewer emerging Israeli startups.”
Yaniv Lotan, a vice president at Start-Up Nation Central, said the correlation between the judicial overhaul and investor hesitancy is clear. He said that while technology investment has stabilized in the U.S. and globally over the past year, over the same period “here in the Israeli high-tech market, we are experiencing a continued downward trend.”
Israel’s high-tech sector is a major engine of the country’s economy, making up half of the country’s exports. It employs tens of thousands and its startup companies have drawn billions of dollars in investment in recent decades.
“In the end, markets don’t like uncertainty,” Lotan said.
Recent weeks have seen international credit agencies warn about greater financial risk in Israel because of the Netanyahu government’s planned overhaul and the deep division it has caused.
Netanyahu and his allies say the judicial overhaul changes are necessarily to curb what they say is an overly activist court and its unelected judges. Critics of the plan say that if passed, they will erode the system of checks and balances between branches of government and lead Israel toward autocracy.
(AP)
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One Response
“start up nation” (the Israeli tech sector, which is probably the most important economic engine in the country), is very anti-frum and anti-nationalist, and pro-LGBTQ. While Israel is in theory a democracy, even in most democracies those who control the economy usually get to dictate political policies, regardless of what the voters want.