Top 10 Israeli Startups to Watch in 2020

Israeli startups and technology companies had a great 2019.

Overall, VC-backed deals raised $4.68 billion during the first three quarters of 2019, almost the same amount raised throughout all of 2018! (Ctech)

In the 3rd quarter alone, 142 deals raised over $2.24 billion, the most in any quarter since 2013. Israel is also on a 6-year upward funding trend.

Here are just a few of the biggest funding rounds for Israeli startups in 2019:

  • Lemonade (Insurance) raised $300 million
  • (Work tracking/automation) raised $250 million
  • Cybersecurity company Cybereason raised $200 million from SoftBank
  • Fintech startup Fundbox raised a $176 million Series C round
  • Content creation app developer Lightricks raised a $135 million Series C round (check them out on the list below!)
  • Israel-linked car financing company Lendbuzz raised $20 million in equity and $130 million in debt financing
  • Israel-linked insurance startup Hippo Insurance raised a $100 million Series D round
  • Israel-linked Trax Image Recognition raised a $100 million round

The Bay Area is also continuing to invest big-time in Israel, with $1.4 billion in total deal value participation last year alone.

However, not everything is up-and-to-the-right with Israeli startups: There were only 53 seed-stage deals in H1, an annual pace that’s 20% less than the number of deals in 2018 (IVC-Online).

New! A VC’s Perspective on Israel in 2020

I’m excited to introduce (for the first time in this series) a venture capitalist’s perspective on the investment market in Israel.

Chinedu Enekwe and Mark Fleming are the founders of Aux21 Capital.

Chinedu Enekwe has an extensive history as a VC and currently serves as CEO and Managing Partner of AffinityVC and Co-Founder & Board Member at tiphub.

Mark Fleming is an experienced VC who has invested in consumer and fintech startups around the world; helping them to become more globally dominant. Before moving back to the United States, he lived in Hangzhou, China where he was working at Alibaba Group as a part of Jack Ma’s management globalization program.

Take it away Chinedu and Mark, I’m excited to hear what you think is in store for Israeli startups in 2020!

As noted above, 2019 capped off an amazing decade of growth for Israeli startups. Over the last decade, startup funding for Israeli entrepreneurs increased 400%. In 2019 these trends continued with a 30% increase in startup funding and a 102% increase in M&A activity for Israeli startups.

The trends for 2020 and beyond show that Israeli startups are looking to dominate their sectors before exiting. It’s clear that Israeli companies are optimizing their businesses in order to exit at larger valuations down the road.

This will create mega deals and mega partnerships with international companies. In 2009 Israel was termed the ‘Start-Up Nation’ but may soon be nicknamed the ‘Mega Start-Up Nation’.

The 2 key sectors we are watching in Israel are cybersecurity and AI.

Cybersecurity startups have long been strongpoints on the Israeli tech scene and AI accounts for nearly half of all investments into Israeli startups. From ecommerce, to consumer tech, to fintech, nearly every sector is experiencing growth in the digitization and collection of data. The AI startups we see that are most interesting are helping companies gather pertinent insights and form predictions from large data sets. I am particularly interested in how AI and cybersecurity will develop the e-commerce and fintech sectors. As consumers become more worried about cybersecurity, yet want to enjoy the convenience of buying and selling anywhere in the world, Israeli startups have unique strengths to play in building globally dominant businesses.

2020 will be another banner year for Israeli startups. In particular, we’re seeing these trends:

1. Startups focused on optimizing growth with a focus on becoming the market leaders before exiting at a later stage

2. Increase in valuations upon exit or IPO

3. Increase in the check size for Pre-seed and A-rounds

4. Increase in the importance of New York as a foreign headquarters for Israeli startups

Thanks, Chinedu and Mark! Now back to the Top 10.

How Did I Choose This Top 10?

With so many great startups to choose from in Israel, how could I possibly narrow the list down to only 10? This one was definitely not easy.

I tried to dig very deep here, looking to find the companies that haven’t had a massive break yet, aren’t household names, and aren’t getting weekly TechCrunch shout-outs.

Enough background, let’s get to the list!

The Top 10 Israeli Startups to Watch

  1. Lightricks: Popular Photo Editing App Creator

You may not know the name Lightricks yet, but I bet you’ve seen their apps before (or have a few on your phone). Facetune is their most popular app and they also recently launched VideoBoost, StoryBoost, and PosterBoost.

In short, Lightricks uses technology to make your pictures, posts, stories, and videos (and those of influencers and brands) way better. They make money by charging in-app for upgraded features. Since launching, Lightricks has seen over 200MM downloads and their revenue has been skyrocketing over the past year.

Keep an eye out on Lightricks in 2020 — I wouldn’t be surprised if Apple or Facebook acquired the 300-person Israeli company this year.

Offices In: Jerusalem

Total Funding: $205MM

2. Deep Instinct: Deep Learning Cybersecurity

Deep Instinct leverages deep learning in order to prevent malware from ever breaching your systems, instead of simply identifying breaches post-event and responding to them. The company provides security solutions across all environments, OS, and device types.

Cybersecurity is a massively growing industry (10% annual growth; currently ~$170B). If Deep Instinct’s claims are true, and investors certainly believe they are, they have a massive opportunity to apply this cutting edge offensive approach to their Finance and Healthcare use-cases.

Offices In: Tel Aviv, NYC, Australia

Total Funding: $49.1MM

3. Applitools: Functional and Visual Testing with Visual AI

As a Product Manager, one of the most frustrating things is when a feature is developed correctly from a technical perspective, but doesn’t match the original design 100% or causes issues with the front-end of another, seemingly unrelated, feature. Catching these types of regressions is extremely difficult and often extremely manual.

Applitools leverages computer vision to identify these types of accidental changes in addition to providing a robust automated testing suite. This is the future of testing, available today.

Offices In: Ramat-Gan, San Mateo

Total Funding: $41.8MM

4. AppsFlyer: Platform for App Marketers

AppsFlyer provides an incredibly robust mobile app marketing management platform.

It includes pretty much everything that a marketer or growth manager needs, from analytics to attribution to audience management to thousands of integrations with all of the tools and platforms you already use.

If you manage an app and you aren’t using AppsFlyer, chances are you’re probably using 3–5 different tools when you could just be using this one. I’m excited to see AppsFlyer continue their meteoric growth in 2020.

Offices In: Haifa + 15 other cities (!)

Total Funding: $83.1MM

5. Carbyne: Modern 911

911 networks in the United States are woefully out of date. Almost all systems rely on the caller to verbally identify their location, they don’t offer text or video support, and they are incredibly brittle (the system was originally invented in the 1960s and hasn’t modernized much)

Carbyne takes on this problem with its thoroughly modern 911 network. The company leverages device location, video from the caller’s phone, caller profile data, information from smart cities sensors (if available) or other IoT devices nearby, pretty much anything that can help enhance situational awareness.

The company has begun selling its product successfully in the United States (after selling initially in Israel) and recently raised a new round of capital to support that effort. Keep an eye on Carbyne in 2020, it should be a big growth year for the company and also a big growth year for emergency support in the United States.

Offices In: Tel Aviv, NYC, Mexico City, London

Total Funding: $23.9MM

Thanks for reading! If you’re enjoying this post, I think you would enjoy my new book Disrupting Yourself.

I’m offering a very limited time Medium discount on the Kindle version here: Disrupting Yourself Special Offer(if you prefer paperback: Disrupting Yourself Paperback)

And if you’re looking to learn more about Product Management or become a better Product Manager, I would pick up a copy of my book: Building Digital Products (New 2nd Edition!)

6. Upstream Security: Security and Analytics Platform for Connected + Autonomous Vehicles

Cybersecurity is one of the largest tech sectors in Israel because the opportunity is simply so massive. However, Upstream Security takes a more targeted approach, focusing on the connected and autonomous vehicle ecosystem.

In a field that didn’t exist a decade ago, connected and autonomous vehicles have grown incredibly quickly and security has been a challenge, to say the least (Hackers and Connected Cars).

Upstream steps in to fill that scary gap and provides a cloud-based platform designed specifically for protecting connected vehicles and smart mobility services from cyber-attacks and misuse (Upstream).

Offices In: Herzliya, San Mateo

Total Funding: $41MM

7. Fleetonomy: Plan, Manage, and Optimize Fleets of Autonomous Vehicles

Fleet management software has existed for decades. However, what Fleetonomy has built is no run-of-the-mill fleet management.

The company has built a software product specifically focused on the soon-to-exist problem of autonomous vehicle fleet management. Fleetonomy also helps fleet owners with white-labeled ride-hailing, on-demand rental, and car subscription apps.

Impressively, the young company (founded in 2016) already counts Audi and Toyota as partners. I expect big things from Fleetonomy in 2020, keep an eye on them!

Offices In: Tel Aviv

Total Funding: $3MM

8. Windward: Understand and Manage Maritime Risk

Maritime is so often a forgotten part of the logistics lifecycle. But as countless startups have shown, most notably Flexport, there is big money and big volume in maritime shipping.

Windward focuses on delivering data science-driven insights to the planning teams managing those shipments. They help those teams maximize efficiency and minimize risk.

It sounds simple, but with all of the potential risks on the high seas ranging from extreme weather to piracy to regulatory risk, shippers need a tool like Windward to simplify their world. The company has been around since 2010, but I predict 2020 will be a breakout year, off the back of a large round of new expansionary funding.

Offices In: Tel Aviv, London, Washington, D.C.

Total Funding: $32.3MM

9. GuestyShort Term Rental Management

You can book home rentals on Airbnb, VRBO, Expedia,, TripAdvisor, the list goes on and on and on. For professional property managers, it’s become an absolute nightmare to manage properties across all of these platforms. Guesty brings all of that information and complexity into one platform with one calendar, one inbox, and one simple interface.

Although Guesty runs a big risk since they are so heavily reliant on the platforms they integrate with, their solution is in the right place at the right time as short term rentals continue to increase rapidly in popularity.

Offices In: Tel Aviv + 7 other cities

Total Funding: $59.4MM

10. Aurora Labs: Self-Healing Platform for Connected Vehicle Software

As we discussed before with Upstream Security, connected vehicles are increasing rapidly in number, but the protection for those vehicles from hackers and even bugs hasn’t kept pace at all.

The average high-end car today contains over 100 million lines of code! Also, close to 98% of new cars made in 2020 will be connected to the internet in some shape or form.

Aurora Labs provides what they have coined “self-healing software” for connected cars. Quite simply, this means they bring Tesla-style over the air updates to all connected vehicles. When a bug is discovered in the connected car software, it will be fixed with an over the air patch quickly, leveraging Aurora’s software platform.

Aurora also claims that their software can fix issues upon detection without the need for any human intervention. I’m a bit skeptical of this claim, but would be love to be proven wrong.

Offices In: Tel Aviv

Total Funding: $11.1MM

Honorable Mentions

SimpoAutomated onboarding and education

Offices In: Tel Aviv, San Francisco

Total Funding: $4.5MM

Prospera TechnologiesAI + Agriculture

Offices In: Tel Aviv

Total Funding: $22MM

All Rights Reserved for Alex Mitchell

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