The last few weeks have shown the power of Israel’s economy. On Wednesday, news came out that Jared Kushner, son-in-law of former President Donald Trump and his senior adviser, is opening an investment firm that will be based in Miami and have an office in Israel.
A few weeks earlier, former treasury secretary Steve Mnuchin and ambassador to Israel David Friedman announced the opening of their own investment office in Tel Aviv. Shortly after that news broke, Softbank announced that it had appointed former Mossad chief Yossi Cohen to serve as its representative in Israel.
The amount of money that each of these funds plans to invest in Israel has not been published, but it will likely be in the billions of dollars. That is billions of more dollars being invested in Israeli technology and businesses.
Softbank’s Vision Fund, for example, has more than $100 billion in committed capital, and has backed such global powerhouses as Alibaba, TikTok and Uber. The multinational conglomerate is coming off one of the most successful years in world business history after it reported a net profit of $45.88 billion for the year ended March 31.
In an interview with The Jerusalem Post last month, Mnuchin said that the new firm – Liberty Strategic – is looking to make major investments in “proven technology and business models where there can still be enormous amounts of growth,” but is not a venture capital fund.
And Kushner’s firm – called Affinity Partners – will pursue regional investments and use the Israeli office as a hub to pursue investments that connect the Jewish state, the Gulf, India and North Africa. Kushner was the key architect behind the normalization agreements between Israel, the United Arab Emirates, Bahrain, Morocco and Sudan, better known as the Abraham Accords.
The establishment of three new investment offices in Israel illustrates not only the influence Israel’s economy – and particularly its hi-tech sector – have on the global market, but also how many opportunities loom on the horizon.
These are opportunities for Israeli tech companies that could find themselves being offered new investments, but also for Israel in the region.
All three of the funds are being led by people with key ties and connections throughout the Middle East. All three – Kushner, Mnuchin and Cohen – were key members of the team that crafted the Abraham Accords. While they will definitely capitalize and leverage those connections for raising money from places like Saudi Arabia and the United Arab Emirates, that is no different than when IDF or American generals step down from their commands and get hired by defense contractors.
News of Kushner’s pending Israel office this week came as three Israeli companies reached unicorn status after raising money at valuations above $1 billion. Israel also saw two new Nasdaq IPOs, and a few big acquisitions.
All of this also comes as Israel continues to come under fire for allegedly selling its Pegasus technology to countries – including those with poor human rights records – who then hacked the phones of world leaders, human rights activists and journalists.
Defense Minister Benny Gantz met with his French counterpart last week and denied reports that the phone of President Emmanuel Macron had been hacked with Israeli technology. The Defense Ministry is currently leading an investigation of the reports and visited NSO’s offices in Herzliya as part of their probe.
Whatever comes of the investigation, and whoever is to blame there is no denying that the affair is a stain right now on Israel’s cybersecurity industry. These new investment offices help tell a different story. That does not mean that Israel should whitewash what has been brought against NSO. On the contrary, it should investigate and hold whoever it needs to be accountable.
But Israel has a lot to be proud of and there are countless opportunities for Israeli tech companies on the horizon. That is a market that needs to be preserved and cultivated.