The Israeli fintech space has grown exponentially in recent times, but after many complaints from startup founders and investors about the lack of resources available to support new infrastructure in the country, the stock-market operator Nasdaq has partnered with the Tel Aviv Stock Exchange (TASE) to mentor companies.
The Wall Street Journal reported that this shift will encourage growth as the partnership will offer advice to private companies and create an exchange in order to raise capital. Prior to this decision in order to grow, companies had to seek listings overseas in countries such as the US or sell themselves to foreign organisations.
Chief risk officer at the TASE, Gal Landau-Yaari believes that the creation of a new exchange will allow foreign investors and Israeli companies to join together so that access to private shares, debt and secondary offerings.
The TASE has a listing of 461 companies with a combined market capitalisation of about $200 billion, but is dominated by firms that are controlled by some of the richest families and oligarchs in Israel, according to the WSJ.
Due to a military that is well-versed in technology, Israel has produced many inventors, small business founders and investors, but due to the lack of facilities that were available to these startups, they were forced to first be listed on the US stock exchange and then the TASE, if at all.
PwC Israel revealed that 62 Israeli-based or Israeli-related companies were acquired in 2015 for around $7.2 billion, an increase of 44% from the year before. Standout acquisitions include the acquisition of navigation app, Waze Mobile Ltd. by Google Inc in 2013 and the purchase of messaging app developer Viber Media by Japanese ecommerce group Rakuten Inc.
Israeli startups to watch
OurCrowd: An equity crowdfunding platform for accredited investors who desire to invest in Israeli and global companies.
eToro: A social investment network that allows users to inform others of their trading decisions and activities.
BioCatch: Provider of biometric authentication and security for mobile and web applications.
BLender: A multinational peer-to-peer lending service.
Colu: Allows access to blockchain technology infrastructure.
Credit Hood: A crowdfunding platform that allows connection to and communication with customers.
Credorax: Provider of online payment processing and acquirer of bank services for online merchants.