When Pennsylvania-born corporate lawyer Ben Wiener emigrated to Israel in the summer of 1998, he was determined to work in Jerusalem’s thriving start-up scene.
Then home to four major venture capital funds and hundreds of angel investors, primarily American immigrants, it was a good time to be a Jerusalem-based entrepreneur.
Optimism, however, turned to pessimism in the early 2000s as the dot-com bubble burst and Jerusalem became increasingly associated with the Second Intifada, rather than investments.
While NDS and Mobileye did continue to grow in their Jerusalem homes into Israel’s future record “exits,” Tel Aviv and surrounding neighborhoods quickly became the sole home for new aspiring entrepreneurs and ambitious start-ups.
“In 2013, I started to work on my own start-up in Jerusalem. I was 43 years old, married with seven kids, had my own idea and needed a very small amount of money to get started,” Wiener told The Jerusalem Post.
“I could not find any investment for that start-up, not even the first penny. The Tel Aviv investors were not that interested, and they were right – it was pretty crazy to be a Jerusalem-based founder in 2013.”
But Jerusalem, Wiener explains, was quietly undergoing a whole new renaissance of start-up activity, almost entirely unnoticed by investors.
There are now over 500 start-ups located in the city. Yet they were beneficiaries of only a small percentage of the $6.47 billion of capital investments made in Israeli start-ups last year.
“It occurred to me that there is no capital in the capital city. My city is the start-up and it is starting up again,” Wiener said.
“If somebody had a little bit of money, they could exploit the mismatch of supply and demand. If somebody had the ability to pick up the handful of great companies that are going to come out of this ecosystem, they would have a tremendous economic opportunity.”
In 2014, Wiener established Jumpspeed Venture Partners, the only micro-venture capital fund investing exclusively in startups born or based in Jerusalem.
After raising and investing a first fund of $3.3 million in 2014, Wiener has now closed a $17.7m. pre-seed investment fund, backed by over 80 American and European individuals, family offices and institutions.
“While the first fund was all Jewish investors, of whom most knew something about Jerusalem, this fund was totally different,” Wiener said.
“It’s not a Zionist charity. I presented them with the disparity of supply and demand in one of the top 30 start-up ecosystems in the world, and it’s starved of capital. It was a purely economic pitch.”
Jumpspeed has invested in 18 start-ups to date, including tapping into the ultra-Orthodox and East Jerusalem’s Arab entrepreneurial scenes. Almost 40% of portfolio companies are led by a female chief executive.
Portfolio companies, which are increasingly gaining recognition far beyond Jerusalem, include award-winning air quality application BreezoMeter; AI-powered car dealership software-maker AutoLeadStar; car accident analysis system MDGo; and personalized testing tool for depression developer Genetika+.
“Start-up markets are risky and you never know what’s going to turn around the bend, but I think all the trends are pointing positive,” Wiener said.
“We have more aliyah and more impressive people moving to Jerusalem, bringing their talents and entrepreneurial ideas into the ecosystem. I don’t see any reason to think that it won’t continue.”