Israel has been affected by the war in Gaza in various aspects since it began on October 7, 2023. One of the country’s most important economic sectors, the tech industry, felt the weight of the fighting intensely. Moran Chamsi, a managing partner at Amplefields Investments, talked with Ynet about the war's impact on the sector.
Let's start with the summary of the past year. How has the ongoing war affected the Israeli tech sector this year? Were there any fields that suffered more or maybe even benefited?
“Before that, I want to wish for a quick return for all the hostages and come back home safely. Regarding 2024 in the tech industry, I would like to say that everybody talked at the beginning of the year about the resilience of the tech industry. We're seeing the growth of the tech industry.”
Israeli Tech in a year of war
(Video: Miki Schmidt)
“It's even more of its resilience. When you see the last survey, you can see that 2024 in the tech industry was a successful year. We're talking about almost $10 billion of investments in Israeli tech companies. We're talking about almost $14 billion from exits. These numbers, these figures showing that the Israeli tech employees, the Israeli tech industry hit and is doing even well from what they expected.”
So it's a surprise for us, I must say.
“It's really a surprise. We started the year with struggles. But as we know, the Israeli entrepreneurs know how to fit themselves to the new situation, to the new ecosystem. I think this is why Israeli founders, are well known as one of the best founders worldwide because we know how to fit ourselves to the new situation.”
“You can see that by the numbers. You know, 2021 and 2022 were enormous years, but then there came all the crises in the tech industry. But if we see the numbers of 2024, we're coming back to the numbers from 2018.”
I assume it's due to the technological domain such as cybersecurity, AI or defense technologies.
“Yes, you can see the major impact in cybersecurity and defense and AI. We saw a huge rise in funding and a lot of the technology that was tested in the war is going to be civilized and tested in the private market. But you can see that the old sector had some recovery from 2023, which was a crisis year for the tech industry. And in 2024 we can see that rising up.
Did Israeli tech companies face challenges in their global collaborations?
“I think they have in a lot of aspects, even technical aspects like flights. It's hard to fly from here to out of Israel and not go out to work and they had some setbacks with everything but we can see that the Israeli entrepreneurs find a way to succeed and to operate within this horrible year. And because they’re fighting, we can see that investors believe in the sector and are investing more.”
We know that the human factor is the most important one in the tech industry. Do you observe a significant brain drain in our tech field?
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“We know that a lot of the tech employees were called to serve in the army and it was it was very challenging for a lot of the companies. But I think a lot of the companies and founders that I spoke during this year found a solution on how to work and cover those employees that didn't come to work. It's challenging but I think that our resilience is stronger than the current reality.”