5 New Thoughts Following 10 Days Living The Crypto Dream In Israel
I launched a small venture fund in June, 2012. I pivoted to focusing on investing in tech companies founded by Israelis after visiting…
Living the Crypto dream in Tel Aviv with my friend Nimrod May, CMO of SIRIN LABS
I launched a small venture fund in June, 2012. I pivoted to focusing on investing in tech companies founded by Israelis after visiting Israel in 2015 (for the first time in 20 years), and being completely blown away by the tech ecosystem. I just came home from my 9th visit to Israel since then, and my second trip since seeing the Crypto Light last year and pivoting to focus 100% of my time in the Crypto, optimizing for time spent at the intersection of Israel and Crypto. In my blog post from that first trip as a Crypto guy, my first thought was that “Israel Is Going To Kill It In Crypto”. I’ve slightly evolved that thought:
#1 — Israel Is Killing It In Crypto
As a picture is worth a a thousand words, I’ll let the graphic below speak to the extraordinary level of activity in the Israeli Crypto ecosystem:
It’s not just the number of Crypto companies, it’s the breadth of companies. And most importantly, it’s the caliber of people working in Crypto that’s truly impressive.
The breadth of companies includes those founded on hardcore tech coming out of universities like DAGLabs and QEDit (zero knowledge proofs were conceived in Israel). It includes consumer facing companies like Coinmama. It’s companies focused on vertical markets where Israel has traditionally been strong like healthcare (DNATix), cybersecurity (Whitestream), and diamonds (Carats.io). While some of the companies have been around for years, like Colu and Chromoway, most were started over the last year or so. Some of the most successful Israeli tech companies of the last 10 years, like eToro and ironSource, are also diving in. As are leading Israeli angel investors like Gigi Levy and VC funds, like Mangrove. Even WeWork has a Crypto focused shared workspace, Hazarem.
#2 — Israel Is ICO Nation
Traditionally, the fund raising environment for start ups in Israel has been challenging for earlier stage companies. While the amount of fund raising in Israel was up 20% in 2017 vs. 2015, the # of start ups receiving funding wss down 17%. But with ICOs, it’s less about where you’re located, and more about your ability to put together an offering that is compelling to global Crypto investors, and Israeli Crypto projects have quickly adapted to this new paradigm.
Bancor set a then record for the largest ICO ever when it raises $153 million from 10,000+ participants in less than three hours in June of 2017 (and a year later, Bancor’s scaling rapidly)
Sirin Labs raised $157 million in December (here’s a blog post on how they did it).
DAOStack raised $30 million, a month ago, selling out it’s public sale in 66 seconds for it’s decentralized governance tools.
At Consensus three week ago, Orbs announced the completion of their $118 million ICO to “fund development of blockchain platform for large-scale consumer applications”.
Some may argue these projects raised to much money. Others may argue that the ability to raise money is not the same as the ability to create a great company. But what is obvious to all, is that the ability to raise capital is a fundamental building block of all great tech ecosystems, and Israel has shown a remarkable ability to leverage the current ICO environment to the massive benefit of it’s Crypto ecosystem.
#3 — Israel Appreciates The Importance Of Community In Crypto….. Because It Is A Community
The main thing that blew me away on my first trip to Israel as a VC, in 2015, was the strong sense of community. I had always felt that part of the Valley’s success was the strength of it’s community, and I felt that, in the community sense, Tel Aviv was like the Valley on steroids.
Now I believe that the biggest difference between Crypto and everything else that came before, is the importance of community to the success (or failure) of projects. Community includes developers on Github. It’s Telegram members. It’s Reddit and Twitter followers. It’s Meetup attendees. It’s Hodlrs. Community members have multiple reasons to want the project to be a success. Much has been written about Bitcoin’s ability to provide powerful incentives to the community.
On average, I hear more discussion and focus on community in Israel than elsewhere, to the benefit of the ecosystem. I think that part of Israel’s ICO success is based on this ability to grow and engage a community. As Israeli lead projects increasingly engage and leverage the community beyond just the ICO, I think their community prowess will be a big advantage vs. the rest of the world.
#4 — Crypto Is Everywhere In Israel
In the post on my last trip, I wrote about how Jabotinsky 2 in Ramat Gan (Tel Aviv adjacent) was Crypto Central. While I spent a lot of time there again this trip, I also spent time in Sarona Market, where Crypto companies like Orbs are situated on the top floors of Israel’s tallest skyscraper, Azrieli Sarona Tower:
The Hottest Home For Tech, and the tallest building In Israel is now The Azrieli Sarona Tower
I made it as far north as Ra’anana, where I had a great meeting with Coinmama, the “…easiest way to buy Bitcoin and Ethereum”.
With Asaph Schulman from Coinmama
The only non-Crypto related event I went to was a great mobility event at the Ritz in Herzliya hosted by Jefferies. As three of my five last Israeli investments we’re in mobility, and as I’m big fans of Jefferies, I decided to spend a few hours at the event. And guess what? There was plenty of Crypto there as well. DAV Networks is a super interesting Crypto project project in the mobility space. I even had the pleasure of meeting a representative from GlobalTech Korea, which promotes business between Korea and other nations. GTKorea has only 7 offices around the world, so it’s impressive that Israel is among those (which also includes the U.S., China, Japan and Germany). The rep was super excited to to connect me with her Crypto focused colleagues in Korea when I visit Seoul next month. It really seemed as though crypto was ubiquitous in Israel.
#5 —Israel Is Home To So Many Incredible Projects, Including Bancor
The graphic at the top of the blog post contained a plethora of potentially world changing Crypto projects. In a swirl of academia, cryptographic expertise, fintech knowhow, chutzpah, and risk taking; the amount of truly compelling Crytpo activity is staggering.
I will just mention Bancor again, for the scale of their ambition, and for the fact that it’s already rapidly scaling.
With Bancor Co-Founder Eyal Hertzog at Jabotinsky 2
I could go on, but the point is clear, Israel is CRUSHING it in Crypto.
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