Israel's Tech Sector is Hot - How Does This Little Country Do it?

"Israel's Hot" and more in the June 19 issue of Red Herring, which reaches newsstands on Monday.
June 12, 2006

How hot is Israel? So hot Lehman Brothers’ Tel Aviv office did six deals in less than two weeks in April—so hot, in fact, Lehman has to add three more investment bankers to the 10 it already has on deck. The tiny Middle Eastern country, with a population smaller than Manhattan’s, has become a global player in innovation, thanks to its thriving venture capital scene and many home-grown startups. There are now 75 Israeli companies listed on the tech-heavy Nasdaq—more listings than any other foreign country but Canada. What’s more, Israel is in a better position now than it was in the tech boom as IT company valuations are more closely tied to fundamentals, the country is less dependent on U.S. venture money, and it has a wider range of tech strengths. Among those growing strengths include medical technology, biotech, and nanotech. But the country hasn’t lost its edge in security and the Internet, either, with a bevy of startups attracting VC investment by focusing on next-generation web applications. Find out more about why Israel is such a happening place for VCs and startups alike in this week’s Red Herring cover story, “The Stars of David,” on newsstands Monday. Here is a peek into the rest of our lineup, which appears along with our other features:

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· “Nine Good Bets” profiles nine of Israel’s hottest startups from wireless video modem provider Amimon to open-source scripting language developer Zend Technologies.

· Learn about the new wave of global startups trying to make parking easier and more efficient using wireless technology in “Parking Pain Relief.”

· “Concentrating the Sun” looks at startup SolFocus’ efforts to use a technology developed for laser surgery to bring solar power to the masses.