Arab Israeli social entrepreneur Imad Telhami has seen phenomenal success from the Babcom customer-service centers he and partner Dov Lautman established to employ Arab women and men in the north, south and Jerusalem.
Babcom (“Your Door” in Arabic) now employs 5,000 people providing outsourced services, including call centers and software development, to Israeli companies. In 2018, Harvard Business School built a case study about Babcom into its curriculum.
But Telhami was increasingly troubled to note that no Babcom client companies were owned or managed by Arabs.
So in 2014, he joined forces with venture capitalists Chemi Peres of Pitango and Erel Margalit of JVP to found Takwin Ventures, the only VC firm in Israel dedicated to investing in startups with at least one Arab Israeli cofounder.
Since 2015, the Takwin 1 and Takwin 2 funds have given 10 early-stage startups monetary support, office space, research assistance, and connections to professional networks.
Fears and obstacles
“After I got to the point of employing 1,000 people through Babcom, I wondered why there weren’t many Arab companies that could do the same,” Telhami tells ISRAEL21c.
“Why aren’t we part of the Israeli startup nation?”
Arabs make up 21 percent of the population and less than 2% of its high-tech workforce. Very few are founders.
Telhami’s research revealed that Arab Israelis aren’t less educated than Jewish Israelis, but they are much more likely to go into healthcare – a needed and worthy career choice, for sure – than to found high-tech startups.
“I realized that Arabs cannot be involved in startups because they don’t know how to dream big, or they are afraid to dream big. And you need to have the courage to dream big to build a company,” Telhami says.
“They feel they are victims and I’ve always said that the opposite of an entrepreneur is a victim. An entrepreneur cannot think as a victim.”
Telhami identified five specific obstacles:
- Fear of failure (“for Arabs, failure is equated with shame and they therefore won’t take risks”);
- Fear of the government (“they think the government will not allow Arabs to be anything but second-class citizens, so why bother working hard?”);
- Fear of the banking system and taking out business loans;
- Lack of entrepreneurial success stories as inspirational models;
- Lack of professional networking opportunities, partly because Arab citizens usually live far from central Israel’s high-tech cluster and partly because they don’t have mandatory military service where Israelis make valuable connections for their future.
We have to be everything
Telhami decided to tackle all these issues at once.
“I came up with the concept of Takwin to help people not feel like victims,” he says. Takwin is Arabic for “genesis.”
“Chemi Peres and Erel Margalit loved the idea so they joined me as partners and then we found Itzik Frid to become our CEO, to make our dream happen.”
Takwin gives portfolio startups “all the infrastructure to build their own companies. We are a VC, an incubator and an accelerator. We are their consultants, advisers, investors, and connection to networking,” Telhami says.
“We have to be everything or we can’t make our entrepreneurs successful.”
Today, even in an uncertain economy where fundraising is difficult, Telhami sees his dream coming true.
Haifa-based Takwin Ventures was ranked by Early Stage Magazine as the top Israeli early-stage fund for fintech startups in 2022.
Among Takwin’s portfolio companies are several in which Telhami and Frid, now its managing partner, see unicorn potential.
One of these is Industry 4.0 startup Feelit. The founders – Technion Prof. Hossam Haick and two of his former PhD students – designed an ink-based sensing technology for predictive maintenance in smart manufacturing environments. Feelit won the 2023 Factories of the Future “Most Disruptive Startup in the Industrial Sector” award at the Advanced Factories and Industry 4.0 Congress in Barcelona. Clients include Henkel, Merck and Continental.
Another is Imagry, developer of a location-independent autonomous driving technology. Under founder Adham Ghazali, Imagry has been testing its software on vehicles in the United States, Germany and Israel. Several months ago, it bested competitors including GM and Mobileye in a bid to install the first autonomous system on electric public buses in Israel. In June, the ambassador of Bahrain took an Imagry-equipped car for a spin.
Soos, cofounded by an Arab man and a Jewish woman, is developing a technology to change the sex of male chicken embryos to address the problem of 7 billion male chicks being killed each year in the egg-laying industry. In 2020, Soos won the $1 million grand prize in the Grow-NY global challenge for food and agriculture innovation.
Aziz Kaddan, cofounder of neurofeedback training platform Myndlift, was chosen as one of the Forbes Israel 30 under 30 standouts in 2016, when he was 22. Myndlift was one of four companies chosen by the UK Embassy to present to Prince William during his visit to Israel in 2018.
Other Takwin companies are in sectors as diverse as gaming, fertility tech and prevention of pressure sores.
Together we are stronger
“All our portfolio companies were founded by leading Arab Israelis, some by a mix of Arabs and Jews, and they all employ both Arab and Jewish Israelis,” says Frid.
“Many are managed by Jewish Israelis because they have more experience, but we see more Arab Israelis gaining experience and growing as great entrepreneurs.”
Frid emphasizes that “Israeli” is an essential part of each Arab entrepreneur’s identity.
“They are Israelis, like I am Israeli. They have the ambition and just need somebody to put them on the runway to success.”
Takwin also runs 3D Generation, the first venture creation program of its kind in Arab society, in partnership with the Google and Reichman Tech School at Reichman University in cooperation with the Israel Innovation Authority. Takwin VP of marketing and business development Fadi Swidan says the six-month program enables ambitious would-be Arab entrepreneurs “to accelerate from high potential to high growth.”
Building success stories
Telhami, who is Catholic, points out that Israeli Arabs aren’t monolithic. “There are Muslims, Druze, Christians, Bedouins and Circassians, just as there are many types of Jewish Israelis. I like to put everyone together because I believe that together we are stronger and better.”
He aims to invest in an additional 10 to 20 entrepreneurs through Takwin.
“We’d like to prove to the Arab community, and to the world, that Arabs in Israel are able to build their own companies and make unicorns exactly as Jews can. We would like to break this glass ceiling that is above the head of the Arab by building success stories,” says Telhami.
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