Ministry of Foreign Affairs

Media and Public Affairs Division

Information and Visual Media Department

Director: Mordehay Rodgold

Project Manager: Ariella Charny

Executive Manager: MGS Language Services

Creative and Project Manager: Visual-Trigger

Design: Hashchuna

Content Research: Maof Creative

Writing: Yoav Fisher

Cover: Dr. Alina Karabchevsky, Ilse Katz Institute for Nanoscale Science and Technology, Ben-

Gurion University; Photographer: Dani Machlis

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A TRADITION OF INNOVATION

RESEARCH AND DEVELOPMENT

INVESTMENT AND BUSINESS OPPORTUNITIES

SECTORS AT A GLANCE:

ICT

SPACE & AVIATION

CYBER

FINTECH

WATER & AGRITECH

HEALTH & LIFESCIENCES

FACTS ABOUT

ISRAEL

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In many ways, modern-day Israel itself is a startup – a country that emerged from the desert sands without natural resources, facing turmoil and conflicts – to beat the odds and become an unprecedented global leader in innovation.

Israel's entrepreneurial spirit is rooted in its history of overcoming obstacles,and today it is home to myriad pioneering startups, backed by robust public- sector support, strategic partnerships, and extensive domestic and international investment. Israeli innovators today are pushing the technological envelope in practically every sector, including cyber, medtech, autonomous driving, energy, machine learning, agritech, drones, aerospace and more.

The innovation ecosystem in Israel is a “virtuous circle” that looks outward to solve global problems with vision and tenacity. Over 8% of the workforce in Israel is employed in the high tech sector, as compared to just over 2% in Europe. In addition, women represent over 36% of all high tech employees in Israel, as compared to 32% in Europe. There are over 7,000 startups throughout the country and some 1,000 operating in Tel Aviv alone.

Reflecting on Israel’s creative energy, former Prime Minister and Nobel Laureate Shimon Peres remarked that, “In Israel, a land lacking in natural resources, we learned to appreciate our greatest national advantage: our minds. Through creativity and innovation, we transformed barren deserts into flourishing fieldsand pioneered new frontiers in science and technology.”

The Arab-Israeli Startup Scene Each year, the high tech scene in Israel grows to include more players from varying backgrounds. Today, some 70 startups in Israel are run by Arab citizens of Israel, with most companies operating from Haifa and Nazareth; about 40 of the start-ups received grants from the Office of the Chief Scientist of Israel. Over 30,000 Arabs are employed in the high tech sector in Israel.

A TRADITION OF INNOVATION

Innovation | A Tradition of Innovation

Did You Know? Chaim Wietzman, Israel’s first President and also a world renowned biochemist, provided seed funding for WEIZAC, Israel’s first computer, in 1954. WEIZAC was one of the firstlarge-scale, stored- program computers in the world and was the foundation for the country’s advanced computer and technology industries.

WEIZAC

A History of Innovation

The foundations of Israeli high tech emerged from the world of agriculture. In 1870, Israel’s first research institution, the Mikveh Israel School, opened its doors with a focus on agricultural and agronomic research. Graduates of the Mikveh School went on to establish kibbutzim (collective agricultural communities), continue their studies, or joined managerial roles as the driving force of Israel’s burgeoningeconomy.

1990sDigital Printing

The Israeli “Indigo E-Print 1000,” the first digital printer,became the

technology behind every printer in the world. Other breakthroughs were Copaxone medication for MS, firewall, and instant mesaging.

1970s First PC CPUThe first IBM personal com- puter (PC) was built using the Intel 8088 CPU - designed in Israel at Intel’s lab in Haifa. It kicked off the modern era of personalcomputing.

1980s EpiladyTwo Israelis

invented "Soft and Easy," the first electric device for hair removal, later renaming it to to "Epilady." Over 30 million of the units were sold worldwide.

2000s PillCam In 2001 the IsraeliPillCam was

introduced as the first of its kind diagnosticcamera for the

detection of abnormalitiesin the gastro- intestinal tract; its used in over 60 countries acrossthe globe.

2000s Flash Drives The first USB Flash Drive was created by M-Systems in 2000, and quickly became a must for every professional and studentaround theworld.

2010s Waze, Mobileye, OrcamJust a few of the

recent Israeli technologiesinclude Waze's navigation app, Mobileye's driver-assistence systems, and OrCam's AIpowered

glasses for the blind and visually impaired.

1960sDrip Irrigation In 1964 IsraeliNetafim developed the first practicalsurface drip

irrigation system. Today, Israeli drip irrigation technology is used in over 110countries.

Israeli start-ups showcase their products at the Innovation Lab event at the Tower of David Museum inJerusalem's Old City I Flash 90

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Creativity, technological prowess and the famous Israeli “chutzpah,” together with robust public and private support for research and development created the perfect storm for the startup ecosystem in Israel – also known also as the “Startup Nation” and “Silicon Wadi.” Whether it's IoT, machine learning and neural networks, drones, cyber or virtual reality, Israeli companies, academic institutions, and R&D powerhouses deliver cutting-edge technologies on a global scale.

Today Israel boasts a dozen Nobel Laureates, including six in chemistry. Israel also has the fourth highest number of companies listed on NASDAQ (after the US, Canada and China), with 94 companies listed as of 2018. Israel is the only country in the Middle East with companies traded on NASDAQ.

Leading multinationals like Intel, Google, Microsoft, Motorola and Facebook, as well as top-tier venture capital firms like Sequoia, Bessemer, and LightSpeed have all established offices in Israel. Frequently, employees of these multinationals also form their own ventures.

The 2017 Bloomberg Innovation Index ranks Israel as the 5th most innovative economy in the world driven in part by the impressive amount of R&D personnel, financial support, and postsecondary education amongst the population.

RESEARCH ANDDEVELOPMENT

Motorola Microprocessors Motorola was the first multinational company to set up an R&D facility in Israel in 1964. The facility was responsible for the Motorala 68000 family of microprocessors, which was the engine behind the earliest personal computers, like the Apple Macintosh and the Commadore Amiga. Over 50 years later, the facility continues to be integral to Motorola’s research and development.

projects.

Did You Know? Google has operated in Israel since 2006, today running an R&D center of over 700 engineers in Israel. As a critical player in Israel's tech community, Google helps other startups succeed by sharing resources for free. In 2013, Google acquired the Tel Aviv based mappingcompany Waze for 966 million USD.

Innovation | Research and Development

Uri Levine, co-founder of Waze I Flash 90

Driving AutotechInnovation Without a single car to its name, Israel has emerged as an autotech superpower. Over 100 Israeli startups are developing algorithms to fuel innovation in autonomous driving and garnering interest from the biggest firms in the world, like GM, Daimler, Volkswagen, and more. In 2016, Intel acquired Israeli Mobileye, which develops driver-assistancesystems, for 15.4 billion USD.

R&D; researchers per capita Multinational R&D centers in Israel

Israel tops the charts for R&D expenditure as a percentage ofGDP and the number of researchers per 1M inhabitants (2015).

Israel is home to over 300 R&D centers of multinationals from the

Unites States, Canada, South Korea, China, Germany and more.

Southern Region

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Israel

Egypt

RussianFederation

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Tel Aviv and Central region

*Israeli Multinational **In progress R&D as a percentage of GDP

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Northern Region

Jerusalem Region

HaifaRegion

Tel AvivRegion

NorthernRegion

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Israeli scientists walking near solar panels in Southern Israel during a project simulating life on Mars as part of the D-MARS project, a spaceanalog research center in Israel, founded by Israeli Space Agency and the Israeli Ministry of Science, Technology and Space I Flash90

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In recent decades, Israel has emerged as a preeminent destination for investment and business development encouraged in part through the establishment of regulatory cooperation, appropriate incentives, andfinancial security to protect equity stakes.

Israeli high-tech firms raised a record breaking 5.1 billion USD in 2017, an increase of 22% from 2016. The averagefinancing round, which has grown consistently over the past six years, reached 8.5 million USD in 2017.

Exits, both M&A and IPOs, from the Israeli high tech sector alone garnered over 23 billion USD in revenue in 2017. The average revenue from each exit has climbed to 106 million USD in 2017, a 110% increase from 2016.

There are nearly 300 recognized investing entities in Israel; 30% of these entities are international, including foreign venture capital firms, private equity firms, and corporate investing entities, all whom invest directly in Israelitechnology.

INVESTMENT AND BUSINESSOPPORTUNITIES

Innovation | Investment and Business Opportunities

Dr. David Zarouk, Bio Inspired and Medical Robotics Lab, Ben-Gurion University I Dani Machlis

Early Stage Funding Per Startup 2017 ($K)

According to the recent 2017 Global Startup Ecosystem Report by the Startup Genome project, Tel Aviv ranks in the top 5 for early stage funding per startup. Jerusalem, with its unique ecosystem, is also in the top 25.

7700 Startups

360 VCs

330 R&D centers

100200300400500600700800900

Israeli high-tech exits 2013-2017 ($B)

2017 at a glance

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Exit Amount # of Exit

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2013 2014 2015 2016 2017

631 investment deals totalling

5.1 billion USD;

112 exits totalling 23 billion USDSi

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Top 5 Exits 2017

15.3 $B

500 $M

430 $M

1.1 $B

350 $M

Prof. Eugene Katz displaying flexible photovoltaic surfaces,Ben-Gurion National Solar Energy Center I Dani Machlis

Capital

Capital

Deals

Deals

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SECTORS AT A GLANCE

Innovation | Sectors at a Glance

ICT (Information and Communications Technology)

According to the World Economic Forum, Israel is an ICT “Powerhouse” of innovation, with over 800 companies powering the sector. Israeli ICT exports grew by over 25% in the last four years, to over 23 billion USD. ICT services constitute over 60% of itsservice export.

Leading Israeli multinationals like Amdocs, Comverse, and Mellanox have all established global leadership positions in their respective niches in ICT. In addition, a number of prominent startups are pushing the latest innovations in the field of communication. Over the past decade, hundreds of leading Israeli ICT firms have been acquired, a testament to the strength of Israel’s ICT sector.

Recent Notable Acquisitions

ICT Exports ($B)

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Waze

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MediaMind

Amobee

Telmap

Dotomi

Onavo

Kontera

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DragonPlay

MobilEye

Aquirer

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Rakuten

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Ball

Intel

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Israeli start-ups showcase their products at the Innovation Lab eventat the Tower of David Museum in Jerusalem's Old City I Flash 90

7700 startups

360 vc funds

330 rd centers

SPACE & AVIATION Israel is one of only seven countries in the world, and also the smallest, that has local space-launching capabilities. The Israel Space Agency (ISA), along with the Israel Aerospace Industry and SpaceIL, are responsible for pursuing continued innovation in the fields of space exploration, aviation technology, and drone technology.

These three agencies, along with numerous academic and professional associations, are bringing aviation technology to the global forefront. Recent initiatives includes the world’s first ever cyber-aviation innovation center, developed through a partnership between Tel Aviv University and the International Air Transport Association (IATA). In mid-2017, Israel, France and Italy launched the exploration satellite Venus (Vegetation and Environment monitoring on a New Micro-Satellite), through the European Vega launcher. The satellite was built by Israel Aerospace Industries with all Israeli-made components, and is the world’s smallest satellite of its kind. Israeli-made vests for protection against radiation are set to be tested by NASA in the 2019 AstroRad mission.

UAV Exports; Units (2010-14)

Since 1985, Israel has accounted for the majority (60.7%) of UAVexports worldwide

Israel

US

Italy

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132

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The Venus satellite for vegetation and environment monitoring built and launched jountly by Israel, France and Italy Centre National D'études Spatiales & Israel Space Agency

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CYBERSECURITY Israel is a global hub for cybersecurity innovation, second only to the United States, with a sector that is estimated to represent 10% of global sales and 20% of global investments. Israel has five academic cybersecurity researchcenters, and nearly 20 international corporate cybersecurity facilities. Anti- virus software developed in Israel protects one in six computers worldwide; from firewall protection to fraud detection and threat monitoring.

The recent 2017 rankings of the “CyberSecurity 500,” published annually by CyberSecurity Ventures, features 36 companies with headquarters in Israel. Given that several companies now headquartered in the US were originally founded in Israel, the Israeli impact is even larger. CyberArk, CheckPoint, and CheckMarx round out the top three Israeli companies on the list.

The most funded fields of 2016 included vulnerability & risk management, mobile security, network security, SCADA, andincident response.

Cyber Research Centers in Israel

Startups continue to raise capital in seed, A, B and growth rounds

SEED A B GROWTH

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PayPal

IBM

EMC

RSA

GE

VMWare

Cisco

Deutshe Telekom

Lockheed Martin

McAfee

Akamai

Intel

Palantir

Intuit

AVG

Palo Alto Networks

F5 Networks

Frauhofer

Israeli cyber security 2017

81 deals

814.5 $M raised;

16% of the all cyberinvestments worldwide

3 largest rounds:

150 $M Skybox Security

100 $M Cybereason

70 $M SentinelOne

Leading multi-nationals, start-ups, investors, VCs and experts at Cybertech Israel 2017 I FLASH90

Innovation | Sectors at a Glance

Cyber Research Centers in Israel

FINTECH Global exposure, corporate collaboration, and extensive experience in security IT help power 480 Fintech companies in Israel.

Israeli startups are easing payment processes, reducing fraud, saving users' money, promoting financial planning, and ultimately pushing the global fintech industry forward. The most recent innovation involves the application of Artificial Intelligence – machine learning, deep learning, and neural networks – to existing fintech solutions.

KPMG’s most recent annual “Fintech100” survey of the leading fintech companies across the globe includes 9 companies from Israel, including Lemonade, PayKey and Zooz.

PAYMENTS

TRADING & INVESTMENT:

LENDING & FINANCING:

PERSONAL FINANCE:

ANTI-FRAUD:

BLOCKCHAIN FIRST:

The DLD Tel Aviv Digital Conference ia Israel's largest international Hi-tech event bringing together hundreds of start-ups, VC’s, investors andmultinationals I Flash 90

14 Innovation | Sectors at a Glance

WATER & AGRITECH

Israeli water technology has a global impact, represented by 50% of the world’s low pressure irrigation systems and over 350 desalinization plants in 40 countries. Israel has made wastewater treatment a primary concern; Israel is currently one of the world leaders in wastewater collection, treatment, andreuse, and is partnering with organizations across the globe to share its know- how. It is also a leader in developing new methods for crop cultivation and irrigation in arid regions. The collaboration between Israeli agricultural research,farmers and extensions services has been one of the keys to Israel's success.

Global players in Israel are driving innovation in biological purification, in extracting drinking water from air, IoT systems for water utilities and more.

% Reuse of Treated Wastewater (2016)

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Israel Spain Australia Italy Greece US

Imrpoving whole-plant water use efficiency at the Vulcani institute for Agricultural Research

HEALTH & LIFESCIENCES

The Israeli Life Science Industry is rapidly growing, playing an important role in the world healthcare market. Israel’s life sciences industry and its commercial successes are propelled by a strong collaboration with academic research and governmentsupport and funding.

Currently, over 1300 Israeli companies are leading worldwide innovation in the fields of medical devices, bio-informatics, medical technology, equipment, and imaging. Continuous, year-over-year, successful performance in the Israeli LifeScience sector has attracted the attention of the worldwide markets.

Israeli companies are responsible for some of the most important recent innovations in the field. Given Imaging, for example, pioneered capsule endoscopy technology, commonly known as the “PillCam”, which is currently used to detect gastrointestinal disorders in over 60 countries worldwide. More recently, companies like Zebra Medical are using artificial intelligence and medical imagingto help radiologists correctly detect and predict abnormalities.

Life Sciences Deal Growth

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LS Deals ($m) # of LS Deals

Prof. Yifat Miller conducting research on Alzheimer's Disease at Ben-Gurion University I Dani Machlis