Trends Watch: Israeli High-Tech

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Oded Agam, Managing Partner & Co-Founder, NextLeap Ventures.

What is your outlook for venture capital in Israel?

I am quite bullish about the VC market in general because start-up investments have low correlation with public markets and therefore provide a great diversification strategy. I am especially bullish about the VC market in Israel because of its growth in recent years.  When you look at 2020, you can see that the Israeli high-tech industry continued its fast-paced investments despite the COVID-19 pandemic with $10.2 billion in 607 deals in 2020, which was a 31% increase year-over-year in capital and a 20% increased year-over-year in number of deals. When you look at the past six years (2015-2020) you can see that Israeli high-tech investments were a total of $36 billion and exits were a total of $83 billion ($60 billion in M&A plus $23 billion in IPO). I believe that this trend of growing investments and exits will continue.

Where do you see the greatest opportunities and why?

We see the greatest opportunities in early-stage high-tech startups in Israel in the AI, health, autonomous machines, digital transformation, trust, sustainability, and space domains that will be disrupting our world in the next 5-10 years.   Some of the more interesting opportunities lie in the convergence between digital, biological and physical, where scientific advancements are enabling the transformation of many vertical industries.

Where do you see the greatest challenges and why?

The short-term challenge is to get over the pandemic and adjust the world to the post-pandemic new normal.  Organizations that invest now in preparing for the new normal will prevail and grow when the crisis is over. 

The longer-term global challenges are the future of democracies, equality, wealth distribution, and preservation of our planet. I hope that democratic countries would continue to lead humanity to a better place, where people are free and able to pursue opportunities in whatever area they choose without any limitations and without causing harm to others or our planet.  I believe that this is the best way to ensure the continuity and prosperity of humanity.  We believe that companies that “do good” are also the ones that would have better financial returns for their investors and stakeholders.

What keeps you up at night?

I am a strong believer in work-life balance, so I sleep very well at night.  What worries me, during the day, is the money that I manage, together with my friends at NextLeap Ventures.  We are investing our own money as well as money that was given to us by individuals with various degrees of wealth (many of them are friends and/or former colleagues), family offices and institutional investors.  These people trust us to use their money wisely and invest it in a smart way that would balance and optimize between the risks and the rewards.  The long-term relationships we have with our investors are the most important thing, and we do whatever we can to meet the high expectations of our investors.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.