Tel Aviv’s startup ecosystem has been ranked No. 3 in the world this year by venture capital firm SparkLabs Global Ventures, following Silicon Valley and Stockholm. New York City and Los Angeles round out the top five list.
The ranking is based on eight factors: Funding ecosystem and “exits;” engineering talent; active mentoring; technical infrastructure; startup culture; legal and policy infrastructure; economic foundation; and government policies and programs.
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“This list is the dream team of the world’s cities and it’s a huge honor to be included in it,” Eytan Schwartz, CEO of Tel Aviv Global (the municipality’s global development arm), said in a statement.
The recognition for Tel Aviv comes on the heels of Israel’s ranking as the second-most innovative nation in the world (after Switzerland) by the World Economic Forum.
Located in the country with the highest number of startups per capita, Tel Aviv is known as Israel’s startup capital. Situated along the country’s central coastline, it is dubbed “the city that never sleeps.”
In addition to its technological ingenuity, Tel Aviv is home to several workspaces that are based on the sharing economy, offering small offices (with shared services such as meeting rooms, copiers and espresso machines) to young startups on a monthly basis. The city’s startup ecosystem enjoys inspiring environments, with many seed-stage startups choosing to set up shop in collaborative work spaces such as WeWork, which operates several buildings in Tel Aviv.
Tel Aviv’s startup ecosystem is also filled with investors of many kinds and nationalities – venture capital firms, private equity investors, institutional investors, incubators and angel investors.
There are roughly 50 active startup accelerators and incubators in the city, more than double the number four years ago. Whether sponsored by the city, a multinational corporation or a local venture capital firm, accelerators give seed-stage startups financial assistance and mentorship.
According to city officials, Tel Aviv is home to nearly 1,000 startups – or 19 startups per square kilometer – and about 50 international research and development centers. Last year, the city was voted as the best startup ecosystem outside the US, thanks to its techie environment and talent pool, by data firm Compass.
“Tel Aviv is the Startup City of the Startup Nation,” Gilad Uziely, director of economic development at Tel Aviv Global, recently told NoCamels. “Innovation is part of the basic DNA of the people of Tel Aviv.”