HERZLIYA, Israel — Nearly 11,000 km away in Portland, Oregon, venture capitalist George Djuric said he was compelled to visit Israel during the country's war with Palestinian militant group Hamas and to pledge support for the high-tech sector.
Djuric, chief technology officer at yVentures who arrived in the US as a three-year-old refugee from Bosnia during the Bosnian war in the mid-1990s, this week joined some 70 other US tech executives and investors on a trip to Israel.
"Coming here is a chance to stand in solidarity with Israel and also support the tech ecosystem, which is the world's second largest after Silicon Valley," he said. "As a technology fund, it makes sense for us to be here."
Although not Jewish, Djuric said he was drawn to Israel by the state's resiliency and as someone whose family's views were shaped by war.
"I was horrified by what happened on Oct 7 and I was equally horrified the next day when I saw people demonstrating in support of what happened," he said, referring to the Oct 7 attack on Israel launched by Hamas.
Investors and analysts had predicted the conflict with the Palestinians would derail a fragile recovery in high-tech, which accounts for more than half of Israel's exports and nearly a fifth of its overall economic output.
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Funding had already dropped sharply amid a global slowdown and a divisive government judicial overhaul when the war took its toll on the economy. Growth, on pace for a 3.4 per cent clip this year, has fallen to an expected two per cent with the outlook at least as grim.
At least 15 per cent of the tech workforce has been called up for military reserve duty. Fighting in the Gaza Strip escalated on Thursday (Dec 21) and Hamas rocketed Tel Aviv, even as the foes engaged in the most serious talks for weeks on a new truce.
Yet, even as the war rages, tech funding deals are still getting done, albeit at a slower pace. Startups have raised more than US$6 billion (S$8 billion) in 2023 compared with US$16 billion in 2022.
On Tuesday, ScaleOps, a startup specialising in cloud resource management, announced a US$21.5 million funding round. Last week, cyber startup Zero Networks, which prevents attackers from spreading in corporate networks, raised US$20 million.
Ron Miasnik of Bain Capital Ventures who co-organised the delegation, said he had expected Israeli startups to go on drawing large sums. He said he believed the country's economy would ultimately bounce back.
"It doesn't matter to us whether the economic rebound takes three months, six months, nine months or 12 months," he said. "We're long-term bullish on Israel."
Miasnik said the idea of the trip emerged from watching other solidarity groups, such as religious ones. "We felt the [US] tech and the venture capital community, which is so heavily integrated within Israel, was missing," he said.
Initially, it was supposed to be just 15 people but, he said, hundreds of people showed interest. They included CEOs and senior executives of US-based tech and VC funds from Meetup.com, Apollo, TPG, Susquehanna Growth Equity, Mastercard, John Deere and Harvard University's endowment investment fund.
In addition to meeting local investors and startups, they met Israeli leaders and families of hostages still held captive in Gaza and toured border towns hit by the Oct 7 attack.
Bain has a number of investments in Israel, including Redis Labs, in which the fund has invested more than US$100 million, and cybersecurity firm Armis, and Miasnik said he was seeking to add more Israeli cybersecurity startups to its portfolio.
Similarly, Danny Schultz, managing director of New York-based Gotham Ventures said he was looking to invest in 10 to 20 Israeli growth stage startups, mainly in fintech, in the next three to five years.
"At the point that Israeli CEOs need more capital, they also need relationships across the ocean in the US and Europe to really help build their companies," he said.
Joy Marcus co-founded a new VC fund called The 98 and only invests in "women-led technology businesses that are disrupting industry".
"I am tortured by the war .. So I am here to support Israel first and foremost," she said. "And I am also very interested in investing in some Israeli women."
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