March 6, 2016
Israel is a particularly interesting market to pay attention to as it has set a notable record – it is the largest exporter of cyber products after the US. Israeli companies exported $6 billion (USD) in cyber-related products and services in 2014. The latest data from Israel’s National Cyber Bureau (NCB) shows a surge in cyber exports from US $3 billion in 2013 to $6 billion in 2014. According to NCB, this figure constitutes about 10% of the estimated $60-billion global cyber market.
Moreover, Israel is widely considered to be home to more startups per capita than any other region globally and ranks highly in the startup ecosystem league rankings just behind Silicon Valley.
Israel has been at a center of interest of major financial institutions like Visa. Last year, Visa Europe announced the launch of Visa Europe Collab in Israel. Following the launch of Visa Europe Collab in London on May 1, Visa Europe Collab in Israel continues the mission of working with startups, entrepreneurs and partners to develop products and services that aim to transform the payments experience for consumers.
Other Fortune 500 companies like Google, Microsoft, Facebook, Apple, IBM, Intel, SAP, Cisco and others have a presence in Israel.
David Page, Co-Creator and Innovation Partner at Visa Europe Collab, commented, Israel is known as the 'startup nation' and its entrepreneurs are turning their creativity to the FinTech arena.
We have been previously covering Israel’s FinTech ecosystem and have listed more than 100 companies operating in the country across segments. This time, we will pay closer attention to the cryptocurrency/blockchain segment as Israel has a set of very promising companies leading blockchain innovation in the region.
Deloitte has recently published a comprehensive report called Israel: A Hotspot for Blockchain Innovation, which contains some impressive statistics.
Why Israel is a fertile innovation ground:
There are certain reasons Israel is considered to be a forefront of innovation in the region. Deloitte lists some important metrics that are making Israel a magnet for innovation.
First, Israel has a unique, talent-rich society. Israeli workforce is ranked second in the world in the percentage of engineers and scientists in the total workforce. It may be related to the fact that Israel witnessed several waves of highly educated immigrants coming from all over the world. In addition to that, young people receive a high-level technical training during their military service and are equipped with a high sense of responsibility and success orientation.
Another reason is the lack of natural resources, which led to a scientific-technological innovation system developed to ensure Israelis a high quality of life. Domestic innovation dynamics is fostered by geographical isolation.
An important hallmark of Israel’s innovative landscape is that the government supports incubator programs to facilitate innovation and growing demand for technical innovations for defense and military purposes. According to the report, the "Investment Law" enables foreign companies to benefit from a company tax rate of only 10%, and investment grants of up to 24%.
The VC industry is reported to be the fifth one in the world for venture capital availability. Israel’s VC industry has approximately 70 active venture capital funds, of which 14 are international VCs with offices in Israel. Moreover, Israeli managers are ranked second in the world for business entrepreneurship.
In addition to all that, Israel is the number one is the world in R&D expenditure per capita. Israel also invests about 4.25% of its GDP into R&D, which is the highest ratio for any country in the world.
Blockchain startups in Israel
First, let’s look at the main players. There are more than 35 blockchain companies in Israel worth paying attention to.
Bitrated protects customers against online fraud with multi-signature transactions.
Magic in Bits monitors exchanges and evaluates their performance and availability to help customers choose what's right for them.
CoinCooler is a kit that helps users to create, encrypt and inspect digital files listing cold storage bitcoin addresses in a secure and easy way.
Hermetic Vault SDK brings secure credential storage to any mobile device, simplifying authentication and privacy control for end-users and service providers alike.
CoinMama offers a quick way of purchasing virtual currency online by using credit card, debit card or cash.
Bit2C is providing trading services in bitcoin. All trading is executed in the Bit2C platform, which facilitates interaction between sellers and buyers.
Bits of Gold focuses on the security, ease of use and adherence to regulation. Bits of Gold operates the largest bitcoin change in Israel today, with strict adherence to local regulation.
Simplex enables cryptocurrencies exchanges to accept credit cards at no chargeback risk.
AlgoBit is an algorithm-based platform that uses data and sophisticated algorithms to execute trades in some of the largest cryptocurrency exchanges in the world.
ChromaWallet has a complete open-source enterprise platform for colored coins. Colored coins is a way to use the bitcoin infrastructure to transfer tokens of value.
CoinSpark is a rich protocol for enhancing bitcoin transactions with third-party assets and messaging.
COLU enables fast access to colored coins and Bitcoin 2.0 infrastructure through an easy-to-use fast and secure API.
Backfeed provides the protocols that make it possible for any disparate group of individuals to easily deploy decentralized applications based on spontaneous, large-scale and free collaboration.
La'Zooz is a decentralized transportation platform owned by the community and utilizes vehicles' unused space to create a variety of smart transportation solutions.
GetGems is a free mobile app available for iOS and Android.
Synereo is a distributed and decentralized social network. It is building a network owned by users and controlled by no one.
Polycoin is a crypto-payments management platform that allows online businesses to start processing transactions in virtual currencies while settling in fiat currency directly to the merchant's bank account.
Epiphyte allows banks to facilitate consumer-to-merchant payments using cryptocurrencies.
PayKey enables payments within social network chat.
Crypto Next aims to make digital currencies easy. The company accepts the largest amount of cryptocurrencies and the largest amount of Fiat currencies.
Zero Bill Bank allows community organizers to issue customized digital currency.
Kindcoin is a digital currency which the user can earn by supporting meaningful causes.
CoinDigger is building a large bitcoin mining pool-based on their patent-pending ASIC design.