Why The World’s Largest Accelerator, MassChallenge, Chose To Open In Jerusalem

Last week, MassChallenge, one of the largest startup accelerators, announced that it will open a branch in Jerusalem in early 2016, its first foreign location apart from London.

Israeli entrepreneurs and companies have previously participated in MassChallenge’s program in Boston, Massachusetts, including the founders of AutoAgronom, MedAware, and JoyTunes, but now the next cohort will have access to the program’s resources without leaving home. The move will enable “entrepreneurs from around the world to experience the global phenomenon of the Israeli startup scene,” said Israel Ganot, Managing Director of MassChallenge Israel.

Masschallenge at work. Photo by Giora Drachsler,

Founded in 2010 by CEO John Harthorne, Masschallenge, like many accelerators, offers participants office space, education, mentorship, and of course exposure to investors. Yet unlike other accelerators, such as TechStars and Y Combinator, MassChallenge does not take any equity in the companies that participate in its program. Instead it gives away $2 million in grants – an investment that has so far paid off. To date, the 835 MassChallenge alumni have raised over $1.1 billion in funding, generated $520 million in revenue, and created 6,500 jobs.

SEE ALSO: Famed TechStars Accelerator Opens Up Shop In Israel

The organization’s decision to expand beyond Boston not only reflects the success of their model, but also the vision of the accelerator itself. Over the next five years, MassChallenge will open ten programs outside the US, which Harthorne hopes will catalyze a renaissance that will “restore creativity to the soul of global economy.”

“We were born out of the very depths of the recession when rampant greed was rapidly destroying the global economy and society as we know it,” Harthorne said at an event in Israel earlier this year. “Startups by their very nature are focused on creating something new, solving problems, and creating growth.”

SEE ALSO: CEO Of MassChallenge Talks To NoCamels 

London was MassChallenge’s first international location, which launched last year. However, the choice of Jerusalem as their location in Israel surprised some, because most of the startup and investor community works in and around Tel Aviv. The reason has more to do with MassChallenge’s mission than a profit-seeking calculation.

Aiming to fill the gap between entrepreneurs and the resources they need to succeed, MassChallenge not only raises young companies, it builds ecosystems. Through its global network of partner companies, sponsors, and investors, MassChallenge channels openings for startups that do not already exist. In other words, Tel Aviv already has an entrepreneurial ecosystem; Jerusalem’s is still in the works.

Jersualem, old and new

A holy city to more than one religion, Jerusalem is not often thought of as an entrepreneurial city. Yet the 3,000 year-old city has a few key ingredients, including universities and venture capital, that could turn its ancient ruins into a 21st century city.

MassChallenge. Photo by Giora Drachsler,

Hebrew University in Jerusalem and its medical school at Hadassah Hospital in Ein Karem have been at the forefront of scientific research. Specifically in drug discovery, research from these institutions has led to the development of the Alzheimer’s medication Exelon and the chemotherapy treatment Doxil.

Meanwhile, Jerusalem Venture Partners, one of Israel’s oldest and most prestigious venture capital firms, has participated in some of the largest startup exists and IPOs, including the 2010 IPO of business intelligence software company QlikTech, valued at $2.5 billion at the time. More recently, the crowdsourced investment vehicle OurCrowd set up shop in Jerusalem and within two years have already funded over 70 companies with $130 million in investment.

The special ingredient

Recent developments in research and funding have kickstarted Jerusalem’s transformation into a startup center, garnering the attention of Time, which ranked the city as one of the top emerging tech hubs. But in order for the city to mirror Tel Aviv’s success, it needs another ingredient: an incubator environment, in which people with good ideas can develop them into good companies. The support that Masschallenge offers aims to do just that, and could ultimately turn one of the world’s oldest cities into a city of the future.

Photos: MassChallenge/ Giora Drachsler, Wikipedia Commons