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Tel Aviv Tech Hub May Be Small, But It Leads with Large Exits, Report Says

A new report by research firm CB Insights says that among the world’s six heavyweight tech hubs, Tel Aviv has the lowest number, highest quality of deals.
One of the world’s heavyweight tech hubs despite its small size, Tel Aviv punches above its weight in terms of tech investment, mergers, and acquisition deals, according to a new report published Tuesday by research firm CB Insights.

The report examines 25 global tech hubs, dividing them into heavyweights—Silicon Valley, Boston, New York, Los Angeles, London, and Tel Aviv—high growth hubs, and up and newcomers.

With a population of less than nine million, Israel’s tech scene is unusually active. According to CB Insights’ report, while Tel Aviv placed 15th in terms of overall deals, it is the most international of all hubs, with non-Israeli investors involved in 71% of its funding rounds. For London, in second place, the number is 44%. Among the heavyweights, Tel Aviv is also the favorite for corporate investors, who are involved in 25% of its deals, compared to 21% corporate involvement for Silicon Valley, in second place.

Among the six heavyweights, Tel Aviv has the lowest number of exits—around 20 in the years 2012-2017, compared to over 200 in pack leader Silicon Valley—but in terms of percentage, the highest number of deals valued at over $100.

As a heavyweight hub, Tel Aviv is characterized by CB Insights as having a higher concentration of later stage rounds—a characteristic supported by reports from Israeli databases such as IVC Research Center and Start-Up Nation Central—and a higher rate of follow-on deals. As a mature hub, Tel Aviv is also characterized by a lower growth rate in the number of equity deals per year.