For more than 10 years, Israel has positioned itself as a global leader for innovation, especially as a fast-growing hotspot for technology. The country is well known for its rich ecosystem and the ability to produce disruptive and great innovation. It is also known as the world’s startup nation. According to a recent report, it has been found that Israel has grown multifold times in the number of blockchain startups since the commencement of 2018.
Supportive Government Regulations
Most of the Israeli blockchain startups are found to be concentrated in the Fintech and protocols, or core infrastructure sectors. Around 23 startups were focused on the security sector. There is no doubt that there has been an unprecedented massive growth in the Israeli blockchain industry but many of them are skipping initial coin offerings with a motive to support equity financing. Though initial coin offerings (ICOs) provide great financial support by crowdfunding, many reports have revealed that around 80% of the ICOs where identified to be scams.
As more-and-more new startups continue sprouting up in Isreal in the coming years, the government will have to refine its regulations in order to make sure that the growth isn’t stifled and meaningful. The country has already passed specific laws which will enable trading and taxation of cryptocurrencies. Recently, the Israeli Supreme Court decided that banks and other financial institution must not disallow Crypto companies’ access to banking services considering the involvement of risk factor with the crypto exchanges.
Israeli Blockchain Association
Gadi Isaev and Roman Gold created an investment platform with an aim to connect Russian-speaking investors to Israeli startups. Gradually over time, investors were keen to know about blockchain technologies and hence they converted the name to Israeli Blockchain Association in November 2017 to act as a source of fund for the blockchain startups of the country. The goal of the association is to make the world better by solving everyday problems through blockchain and along the way on the money. One example of their investments is, Jerusalem based Revelator founded by music industry veteran Bruno Guez. The startup firm developed a cloud-based platform over which the users can register large volumes of digital music assets and manage revenue distribution via a smart contract application. When any song is uploaded to the Revelator, the firm monetizes that content online over Spotify or Apple Music and streamline the transactional reporting the automatic matching and allocating revenue to the song and its creators. Using the smart contract app the payment (which is decentralized) is directly put into the creator’s wallet ID rather than delaying through any third party. Revelator has raised about $7 million and has completed 125,000 contracts within the system.
Support Systems for Israel’s Innovative Success
The country has ranked the second position in the world in terms of engineers and scientist in the workforce. Technical training is provided to young people during their Military Service which develops a high sense of responsibility and success orientation from an early age.
The government “Investment law” supports foreign companies to benefit from the company tax rate of only 10% and investment grants of up to 24%. Israel tops the position in the world in research and development expenditure per capita. It is also observed that the country invest the highest in the world in R&D.
There is a lot of venture capital availability in Israel with more than 70% active venture capital firms out of which 14 are International venture capitals having branches in Israel.
Leading multinational companies such as Google, Microsoft, Apple, IBM, SAP, Cisco, Johnson and Johnson, and many other global techs have their local presence in the country.
Notable Israeli Startups
This startup firm uses blockchain technology to provide its users with an online platform to buy and store goods in a secure and validated manner. The company raised $2.5 million in seed investment in January 2015. The founders created an application programming interface for developers and offering an application for customers to make purchases on anything ranging from sporting tickets to art pieces. The startup has partnered with Revelator(music sales and marketing intelligence provider to the creators) and hence also stores digital copies of songs on its blockchain platform with the facility that if any Intruder tries to invade any song then the creator is immediately notified about the same.
This startup is set up with an aim to make transactions in the shipping industry paperless and rather more electronically on a blockchain ledger. It also validates for the document forging if any.
Getgems is a is a social messaging app which allows the user to send cryptocurrencies. On a similar Note with already existing messaging apps like WhatsApp/Telegram, users along with messaging can also exchange virtual currencies via the application. This startup was awarded the title of “most visionary social media solution” at City Mobile Challenge in Europe, the Middle East, and Africa.
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