Unicorn sightings are becoming a frequent occurrence in Israel’s hi-tech sector. More than a dozen privately held Israeli start-ups have crossed the $1 billion mark in 2021 alone, as Israel’s red-hot venture investment sector continues to gain momentum.
According to a list published by TechAviv, there are no fewer than 61 Israel-related private companies worth more than $1b. Of those, 17 were added to the list during the first three months of 2021.
Three new companies have joined the club in the last week alone. On Tuesday, cybersecurity company Orca Security, which was founded just two years ago, said it raised a $210 million Series C round at a $1.2b. valuation. The company said it achieved growth of more than 1,000% in 2020 for its cloud-based solution, which does not require software to be installed on the systems it protects, making it easy and fast to deploy.
Last Thursday, Wiz, another cloud-based infrastructure security company, raised $130m. in Series B funding, just three months after it raised $100m. in a Series A round and nine months after the company was founded. The latest round gives it a $1.7b. valuation. The company’s co-founders include Assaf Rapaport, who previously founded Adallom, which was acquired by Microsoft for $320m. in 2015.
Also last Thursday, Tel Aviv-based e-commerce marketing platform Yotpo raised $230m., bringing the company valuation to $1.4b. and its fundraising total to $406m. Just seven months earlier, the company had raised $75m. at a valuation just a bit shy of $1b. The company is looking to hire about 240 new workers, including 120 in Israel.
Other companies that have crossed the magical $1b. threshold this year include Rapyd, Melio, K-Health, TripActions, Drivenets, OwnBackup, Innoviz, Armis, Earnix, Papaya, Aqua Security and Snyk. Most of these operate in the fields of cybersecurity, cloud data, fintech, e-commerce, artificial intelligence and analytics.
And that’s not to mention the IPO market. On Monday, web monetization company ironSource said it will raise up to $2.3b. in cash in a SPAC (special purpose acquisition company) offering at a value of approximately $11.1b. A week earlier, social investment platform eToro said it will do a $10b. SPAC offering. Both would be the largest IPOs in Israeli history. Other Israeli companies expected to complete large offerings in the coming months include OrCam, REE Automotive, SimilarWeb, Taboola and Outbrain.
Analysts point to a number of factors working together to create such a bullish environment. Among them are the entry of large international investment funds into the market; a number of large funding rounds at high valuations in recent years that have raised expectations in the tech sector; several second- and third-time entrepreneurs who have made large exits and are now shooting to build even larger corporations; the rise of SPACs as a tool to do an IPO quickly; a mature market for secondary shares, which allows a founder to cash out some of his stake in the company and continue growing without an exit; and the overall rise in stock market valuations.