Israeli Tech Entrepreneurs Choose New York for US Expansion

Israeli tech entrepreneurs are increasingly selecting New York City as a hub to expand in the US, driven by travel disruptions from the ongoing Gaza war and other challenges that complicate attracting foreign investors and building businesses.

According to a new report by venture capital fund 97212 Ventures, New York is now home to about 560 privately-held startups founded by Israelis. Last year, this number was 450, including public companies, as per data from Israel Mapped in NY.

Eyal Bino, founder of New York-based 97212 Ventures, stated, "We are seeing dramatic growth of Israeli founders of startups over the past year moving to the Big Apple. Founders who raise their first funding are moving to New York quicker than ever before to build a US base, typically six to 12 months after recruiting an R&D team in Israel."

Since the war began with Hamas on October 7, 2023, Israeli startups have faced difficulties in securing financing, operational disruptions from military reserve duty, flight cancellations, and investor caution. Foreign airlines' service halts to Israel made it hard to do business, prompting many startups to relocate employees to target markets like the US.

Bino explained, "With fast developments in AI and bigger competition in almost every tech category, startups need to grow faster and be closer to customers. It's hard for Israeli founders to manage this over Zoom or with infrequent visits, especially with travel issues and high costs, so moving quickly makes sense."

Eyal Bino, founder of New York-based 97212 Ventures. (Courtesy)

The report found that 30% of Israeli-founded businesses in New York are early-stage startups. Industries include 60 cybersecurity startups, with the rest in AI, enterprise software, fintech, and financial services. About 15% have a female member in the founding team.

Out of the 560 startups, 27 are unicorns (worth over $1 billion), up from about five in 2019. California leads with 35 Israeli-founded unicorns in the US.

New York has become a global hub for Israeli startups seeking growth beyond Israel's small market. Bino highlighted reasons: access to US public markets, a larger pool of investors and customers, and proximity to venture capital funds. "If before, Silicon Valley was the top destination, especially for cyber companies, there's no question now why many choose New York—due to the time difference, Israeli entrepreneur community, vast capital access, customers, and a thriving ecosystem," he said.

Over 20,000 Israelis live in New York City, which has the largest Jewish population outside Israel, according to the NYCEDC. The city hosts over 25,000 startups and 300 VCs.

Bino added, "The tech community in New York shows a lot of respect for Israeli founders who persevere despite the challenges of the last two years."

97212 Ventures, founded in 2022, is a $20 million fund investing in Israeli early-stage startups and facilitating their US market entry for growth.