The world-leading high-tech ecosystem in Tel Aviv experienced significant growth in 2020 despite the pandemic, according to a report from the Tel Aviv-Yafo Municipality’s Center for Economic & Social Research, Tel Aviv Global & Tourism, and IVC Research Center.
Tel Aviv hosts 2,865 tech companies, including 115 R&D centers of multinational corporations. During the past five years, the number of tech companies active in Tel Aviv grew by 25% compared to a 16% increase across Israel.
Other key findings for 2020:
• Tel Aviv hosts 29% of all the tech companies in Israel. Half are startups, 40% are in mid-stages or pre-scale, 6% are scale-ups and mature companies, and 4% are multinational R&D centers.
• Scale-ups employ 54% of the workforce in the Tel Aviv tech ecosystem. Overall, Tel Aviv tech companies account for 20% of the Israeli tech workforce and generate nearly half of the total volume of investments and exits value.
• Investments in Tel Aviv tech companies soared to a record $6.8 billion, 34% higher than in 2019, and accounted for 48% of all investments in Israeli tech companies.
• Foreign investors from 35 countries hold 68% of total investments in Tel Aviv companies.
• Tel Aviv high-tech exits (mergers and acquisitions) reached a record $4.43 billion, a 20% increase over 2019 and 46% of all Israeli exits by value.
• Of the 20 tech unicorns located in Tel Aviv, 14 of them became unicorns in 2020.
• Three Tel Aviv companies completed IPOs in leading stock exchanges: NYSE, Nasdaq and Euronext.
• Between 2016 and 2020, there was a 44% growth in the number of Tel Aviv-based investors. That includes an 89% increase in the number of VC funds and a 70% increase in the number of venture capital management companies.
• Some 60% of the investments in Tel Aviv companies went to scale-up companies, 30% to the pre-scale companies and 10% to early-stage companies.
• The leading tech clusters in Tel Aviv in 2020 were AI (artificial intelligence), fintech, big data and SaaS (software as a service).
“Throughout the report, it is clear that outstanding human capital is one of the main reasons for the success of the ecosystem,” said Mayor Ron Huldai.
“Tel Aviv’s talent is a magnet for multinational corporations and foreign investors who join the growing local scene of innovators. The tech industry demonstrated its value to our city and country throughout this challenging year, while its cutting-edge ideas and developments remain at the forefront of global innovation.”