Earlier this week, Calcalist, Israel’s main enterprise newspaper launched their 2025 VC Survey with my ideas on 2024 for Israeli startups and the tech {industry} at massive, in addition to and predictions for 2025. You possibly can learn the unique piece right here. I’m sharing it on VC Cafe as effectively as not all readers observe the Israeli press.
“If I might summarise 2024 for the Israeli tech {industry} I’d say it’s been a 12 months of Resilience. Scaling startups is difficult as it’s, however Israeli founders needed to cope with a lot extra on high of the common enterprise challenges and nonetheless delivered.”
Eze Vidra
Remagine Ventures has joined CTech for the primary entry in its new 2025 VC Survey. Right here, outstanding VCs within the Israeli tech ecosystem are requested questions in regards to the final 12 months and what the neighborhood can count on within the 12 months forward.
Because the battle settles into its second 12 months and American management is ready to alter, many parts could come into play as we enter a brand new 12 months. That stated, there’s nonetheless optimism in how Israeli startups dealt with themselves in 2024 and ready for 2025.
“The impression of latest American management on the worldwide high-tech {industry} and financial system stays to be absolutely seen,” he added. “Nonetheless, a supportive US administration can foster collaboration and open doorways for Israeli entrepreneurs within the US market.”
You possibly can learn your entire interview beneath.
Fund ID Identify of fund/funds: Remagine Ventures
Complete sum of the fund: $55M
Companions: Eze Vidra, Kevin Baxpehler , Etan Ilfeld
Notable/choose portfolio firms (lively): Minute Media, Hour One, Munch, Keewano, Playo, Quiiiz, Sneaky Panda
Notable exits: Clay (offered to Kangarootime)
2024 is sort of over. How are you going to summarize it by way of the Israeli high-tech {industry}?
If I might summarise 2024 for the Israeli tech {industry} I’d say it’s been a 12 months of Resilience. Scaling startups is difficult as it’s, however Israeli founders needed to cope with a lot extra on high of the common enterprise challenges and nonetheless delivered. Israeli startups raised 35% extra within the first 9 months of 2024 than the equal interval in 2023 (pre-war) and exits exceeded $13 billion, regardless of the battle.
Waiting for 2025 – What challenges and alternatives await the Israeli high-tech sector within the coming 12 months, and the way are you, as buyers, making ready for them?
My hope is that we’re near the tip of the battle (and the return of the hostages) on the geopolitical entrance and I’m optimistic for Israeli entrepreneurs on the tech entrance.
This presents alternatives for breakthroughs in areas resembling AI, cybersecurity, and local weather tech. As buyers, our preparation entails:
? Intently monitoring world tendencies.
? Looking for investments in sectors poised for progress.
? Supporting portfolio firms with strategic steerage.
We’re excited to accomplice with pre-seed startups on the forefront of utilized AI, engaged on industry-specific niches and including automation to issues encountered by firms and customers. There are loads of damaged client journeys that we’re excited to deal with with know-how throughout leisure, training, gaming, well being, life-style, and so on. We predict that post-war we’ll see even stronger worldwide investor and company curiosity in Israeli startups.
How will new American management have an effect on the worldwide high-tech {industry} or financial system? And the place does this place Israel and its entrepreneurs?
The impression of latest American management on the worldwide high-tech {industry} and financial system stays to be absolutely seen. Nonetheless, a supportive US administration can foster collaboration and open doorways for Israeli entrepreneurs within the US market. This might result in elevated funding and partnerships, benefiting each international locations. I additionally see Trump’s intention to cut back crimson tape and forms and hope it can have a constructive impression on the exit choices for startups, together with extra M&A and IPOs.
What are the three most essential issues the Israeli authorities ought to do at the moment to speed up the high-tech engine within the coming 12 months?
- Put money into training to unlock future expert expertise – Israeli innovation depends closely on a strong pipeline of expertise. Robust funding in training and expertise improvement initiatives are a lot wanted.
- Enhancing entry to capital: Israel’s high-tech sector thrives when startups have ample assets and operational assist. For instance, initiatives like current plans by the innovation authority to unlock institutional funding in enterprise capital.
- Fostering a supportive regulatory setting, or regulation round AI or the exports of protection tech can have a fabric impression on firm creation and exports.
Are there new sectors you see as related? Are there any fields you anticipate will weaken considerably within the coming 12 months?
I consider we’ll see the present tendencies proceed in AI, however firms being created now which are AI first and may be constructed on a extra strong infrastructure would require much less capital to get began. Inside AI, I’m significantly excited in regards to the potential of AI Brokers and vertical AI functions tailor-made for particular industries. I consider we’ll proceed to see Israeli startups excel in cybersecurity, addressing new menace verticals like deepfakes, in addition to improvements in protection tech.
Is Israel lacking out on the AI revolution within the world arms race? If not, what ought to the native {industry} deal with to hitch the worldwide race?
Israel has one of many largest concentrations of AI expertise per capita, primarily based on Stanford’s 2024 State of AI report. Nonetheless, foundational mannequin firms, aside from French firm Mistral, have been primarily created within the US and China given the prices related to coaching these fashions by way of inference, knowledge, and expertise.
That being stated, Israel will proceed to play a powerful position in AI, whether or not it’s on the tooling facet (of knowledge pipeline and DevOps) in addition to within the software layer, bringing extra workflow automation to sectors much less disrupted by know-how until at the moment.
Might the worldwide IPO drought finish within the coming 12 months?
I’m cautiously optimistic that the brand new administration within the US will take away crimson tape and we’ll begin seeing extra IPO exercise in 2025. There’s a pecking order, however I’m cautiously optimistic that Israeli startups will even be a part of this subsequent wave.
From an investor’s perspective: will the approaching 12 months be higher for early-stage startups or extra mature firms?
It relies upon. On the one hand, firms being began now can profit from stronger infrastructure to construct on and fewer capital wanted to deliver merchandise to market. Extra mature firms may imply firms which have but to regulate to present market pricing and maybe that have been constructed on an older tech stack. That being stated, competitors can also be rising and the big tech firms are leaning in and persevering with to innovate, making the aggressive pressures higher for brand new startups.
Did you increase fund cash in 2024 for an current fund or a brand new one? What are your expectations relating to this matter for 2025?
We did. I can not reveal particular data but, however we’ve seen the market heat up a bit extra in current months for a wide range of causes. This can be a nice time to construct and make investments on the earliest levels.
What number of investments did you make in 2024, and the way does it evaluate to earlier years?
We made six new investments up to now 12 months, which is extra lively than we’ve been in 2023 (three investments). Total, we’ve seen maybe a slight lower within the variety of firms we’ve reviewed (maybe on par with the decrease variety of new startups which have been created), however the high quality of founders we’ve seen has gone up. Founders selecting to start out an organization within the present market already include a resilient mindset and we’ve been lucky to accomplice with a number of entrepreneurs who began and offered earlier firms in addition to first-time founders with sturdy {industry} expertise.
Present an instance of an intriguing funding you made in 2024. What units this firm aside, or what’s distinctive about its sector?
It’s onerous to decide on just one, and to this point all of our investments in 2024 selected to remain in stealth mode for now, however we’ve invested in Keewano, along with Andreessen Horowitz. Keewano is a co-pilot for product managers, offering real-time behavioral insights on cell, beginning with gaming and client apps. The group is phenomenal, two of the co-founders led one of many top-grossing video games on the app retailer, and the opposite two co-founders scaled and offered two startups beforehand. It’s an enormous market and present options are much less environment friendly.
Two notable firms that you just assume will thrive in 2025:
Firm Identify: Aigency
Sector + description: AI brokers, agent platform for the transactional net.
Funding quantity: $1.5M
Founding 12 months: 2024
Reasoning why that is their 12 months: 2025 would be the inflection level the place AI brokers turn into helpful sufficient to go mainstream and escape. Aigency is constructing probably the most distinctive agent providing, a powerful and skilled group, and is positioned effectively to take a powerful market lead in 2025.
Firm Identify: Quiiiz
Sector + description: Gaming & Training, play and win
Funding quantity: $3.7M
Founding 12 months: 2023
Reasoning why that is their 12 months: Quiiiz created a novel expertise, reinventing the quiz format throughout classes.
I am a former normal accomplice at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google’s first bodily hub for startups.
I am additionally the founding father of Techbikers, a non-profit bringing collectively the startup ecosystem on biking challenges in assist of Room to Learn. Since inception in 2012 we have constructed 11 faculties and 50 libraries within the creating world.
