The arrival of the COVID-19 pandemic in the first quarter of the year sent Israel, like other countries across the globe, into a scramble. While the country has experienced considerable economic damage, there are some that have reached new heights this year.
Of the 45 Israeli companies that have reached “unicorn” status – privately-held companies valued at over $1 billion – 15 have joined the list in the last year. The term has become a universal benchmark of glory in the world of tech and a topic of much research and admiration.
Yaron Samid, a seasoned entrepreneur and founder of Tech Aviv, a global network of top Israeli startup founders and investors, has been shining a spotlight on these unicorns for a number of years.
When he compiled his annual list of Israeli unicorns in 2018, there were just 18 in total founded by Israelis. The 45 unicorns on the list today have a combined value of $92.6 billion and have raised more than $41 billion to date.
Of the 15 unicorns that broke into the list this year, all but one have offices in Israel. Together they employ over 2,500 Israelis, according to data from these firms on LinkedIn.
Samid was excited to note the variety of this year’s new unicorns. “As a tech ecosystem matures, founders emerge from multiple disciplines. Traditionally we had mainly deep tech experience stemming from military careers in fields such as cybersecurity, networking, telecommunications and semiconductors. Today we have founders with design, UX, marketing, finance, gaming and healthcare backgrounds,” he tells NoCamels.
Some investors even believe that down the line, the coronavirus pandemic will emerge as one of the driving forces behind a reinvigorated tech ecosystem.
Nicole Priel, vice president at Ibex Investors, a firm that recently raised a $100 million fund to invest in Israeli tech, notes that the years following the last major recession in 2008 “were fantastic vintage years for tech and venture investing.” Priel mentions public companies like Airbnb, Uber and Slack, that were founded in the midst of the Great Recession as examples of startups that were born and grew into unicorns at times when others were cautious and defensive.
“If you consider that some organizations used to ban employees from working remotely or on Wi-Fi, you can see why some solutions have seen demand skyrocket in the last year,” she says, referring to the tremendous shift in cybersecurity needs as a result of COVID-19.
The shift also presented new opportunities for industry competitors and investors and many of this year’s unicorns capitalized on the rapidly changing conditions. In addition to the feelings of optimism, high confidence in Israeli tech was backed up empirically. Over $9.5 billion was invested in Israeli companies in what has been a record-breaking year.
We take a closer look at the 15 companies that were welcomed into the stable this year:
SentinelOne: $3.1 billion
Following a steep rise in cybersecurity attacks in 2019, SentinelOne, an autonomous endpoint protection company based out of Mountainview, California, was poised for big growth at the start of this year— something it achieved emphatically. Led by Israeli entrepreneurs Almog Cohen and Tomer Weingarten, the company reached unicorn status at the beginning of the year after raising $200 million. This was seen as an incredible feat, given that the company had raised $120 million just eight months earlier to achieve a nearly $500 million valuation.
In November 2020, after benefiting from the growing need for cybersecurity created by a mass-shift to work-from-home created by COVID-19, SentinelOne raised a $267 million round bringing the company to a valuation of over $3 billion. Their AI-driven approach, which is designed to keep up with the advanced nature of new cyber attacks, has clearly been vindicated and rewarded by recent events.
Snyk: $2.6 billion
Founded by Assaf Hefetz, Guy Podjarny and Danny Grander, Snyk is a London-based firm providing a new security solution to software developers facing a range of challenges that come with integrating open-source code, container infrastructure and other common development features. Part of their unique contribution has been the incorporation of security into the development process instead of the existing model in which a product is sent to be secured after it already exists.
2020 was a year of tremendous growth for the company, which became a unicorn after raising a $150 million investment round in January. This was followed by a $200 million round in September that brought the company to a $2.6 billion valuation.
Forter: $1.3 billion
Forter has benefited from its position at the intersection of two industries which took off this year: e-commerce and cybersecurity. Founded in 2013 by Israelis, Liron Damri, Alan Shemesh and Michael Reitblat, the unicorn focuses on preventing fraud in online commerce.
This strong summer showing was followed by more good news as Forter raised $125 million in November, capping off a huge year in which the company doubled its revenue and its team, while enjoying its first cash flow positive quarter, according to CEO Michael Reitblat.
Cato Networks: $1.1 billion
Prior to co-founding Cato Networks with Gur Shatz, Shlomo Kramer founded Check Point and Imperva, two cybersecurity companies that are still publicly traded today.
Cato Networks works on Secure Access Service Edge, or SASE, a global, cloud-native service that relies on software instead of the current MPLS. This is a more cost-efficient model that has benefits for networking, as it is scalable and quick.
In November the company secured $130 million in an investment round led by Lightspeed Venture Partners. Their recent success has been accelerated by remote-work trends, and seems sure to continue into the future.
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Armis: $1 billion
Founded in 2015 by Yevgeny Dibrov and Nadir Izrael, Armis was acquired by Insight Partners in January at a $1.1 billion valuation, marking the first major tech deal for an Israeli company in 2020. The company provides security to companies with IoT devices that cannot be protected by an agent. It does this by scanning a company’s network for all devices, categorizing them and observing their behavior. This passive approach allows Armis to understand what typical behavior is and respond automatically to security breaches.
Gong: $2.2 billion
Gong is a Silicon Valley-based startup founded by Amit Bendov and Eilon Reshef, two experienced entrepreneurs who created a wildly successful, AI-based sales enablement software with a fast-growing clientele that includes brands like PayPal, LinkedIn, HubSpot and Shopify. They utilize artificial intelligence to help sales teams analyze their communication clients to gain insights into sales methods and pitches. The company raised $200 million in August 2020.
Avant: $2 billion
Avant is a Chicago-based fintech company that has helped over a million customers get access to $6.5 billion in loans and to 200,000 credit cards. The company, which was founded in 2012 by Israeli Al Goldstein along with John Sun and Paul Zhang and serves consumers in the United States and the United Kingdom, uses machine learning algorithms and big data to expedite the process of taking out a mortgage or a personal loan. Over the summer, Avant also began offering mortgages at a fixed rate of 1.95 percent in Ireland.
Tipalti: $2 billion
Tiplati is a cloud-based payment automation startup based out of San Mateo, California. Founded by Chen Amit and Oren Zeev, Tipalti manages invoices, tax compliance and other tedious tasks. Since its founding in 2010, the company has raised $279 million and has grown to facilitate over $12 billion annually in payments.
The fintech startup raised $150 million in October in a round led by Durable Capital Partners and plans to use these funds to increase its global presence and market position.
Rapyd: $1.2 billion
Founded in 2016 and based in London, Rapyd is a fintech startup based in London that is changing the way payments are made in a global economy. Their platform allows users to make and receive payments in local and foreign currencies easily. Additionally, Rapyd takes care of compliance and regulation issues that can be burdensome for businesses and individuals. Among their useful products is an e-wallet that allows holders to take out cash from an ATM machine in a foreign country without having a foreign currency account.
In December of 2019 they raised $20 million in funding and reached a valuation of $1.2 billion. Though they attained unicorn status at the end of 2019, due to the timing, they were not included in last year’s list.
Moon Active: $1.25 billion
Unicorns also live beyond the cybersecurity and fintech industries. Moon Active is a game development company that became a unicorn in January by selling 10 percent of the company to the American fund Insight Partners for $125 million.
Online gaming is a lucrative industry and has grown as more people stay home to quarantine due to COVID-19. Moon Active boasts over 100 million downloads and serves users in over 130 countries. Its most popular game is Coin Master. The company, founded in 2012 by Samuel Albin, also acquired Belarus game developer Melsoft this month.
Insightec: $1.3 billion
Insightec is a medical device company that was founded in 1999 by CEO Kobi Vortman. The company develops and markets its Magnetic Resonance-guided, focused ultrasounds as an alternative to more invasive surgery. The ultrasounds are used to treat essential tremor (ET) and tremor-dominant Parkinson’s disease.
Over the summer, Insightec announced that it secured Medicare coverage in the United States for its ultrasound-treatment of ET, greatly increasing the number of people who will have access to the care by millions.
The firm announced in March that it had raised $150 million and attained unicorn status.
VAST Data: $1.2 billion
VAST Data is a data-storage startup based out of New York City. The company was founded in 2016 by Jeff Denworth, together with Israelis Renen Hallak and Shachar Fienblit, and went to market in 2018. The company sets out to simplify the modern data center. They do this by consolidating applications into an all-flash storage system. This allows them to work with very large quantities of data in a more affordable way. Customers in this market typically, “tend to deal with petabytes of data and storage price tags beginning at a million dollars,” said Hallak.
The company has raised capital very quickly, and in April announced that their $100 million Series C round had brought them to a $1.2 billion valuation.
Redis Labs: $1 billion
Redis labs is a software company founded by Israelis Ofer Bengal and Yiftach Shoolman based in Mountain View, California. They provide a database management system, Redis, that automates database provisioning and can be accessed on the cloud or as open-source software. One of its strengths is that it is markedly faster than Oracle or Microsoft’s SQL Server.
This August Redis Labs became a unicorn after raising $100 million.
Sisense: $1 billion
Sisense is a Software-as-a-Service company that develops and sells business intelligence and analytics software that allows companies to simplify their data and make complex decisions more easily. Their clientele includes large global companies like Wix and General Electric.
Founded in 2004, Sisense is one of the older companies on the list. Their valuation rose from $600 million to $1 billion in just over one year. In January 2020, Sisense became a unicorn after a $100 million investment round led by Insight Partners. The company reached another milestone of success, reporting over $100 million in annual recurring revenue.
SimilarWeb: $1 billion
SimilarWeb is a business intelligence software company that helps users track web traffic to better understand their competition and increase market share. Founded in 2007 by Israelis Or Offer and Nir Cohen, SimilarWeb enables research that assists digital marketing, sales and investment professionals among others. In October of 2020, the New York City-based company raised $120 million. The product has been widely adopted and is currently being used by more than half of Fortune 500 companies.