Following a flurry of investment activity in recent months, New York is now home to 21 Israeli-founded unicorns – privately held companies valued at $1 billion or more – according to the United States- Israel Business Alliance. Each of these companies' global or US headquarters is based in Manhattan, establishing New York as the city with the second most Israeli-founded unicorns in the world, behind Tel Aviv.
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"The numbers we're seeing in New York are unprecedented," USIBA president Aaron Kaplowitz said. "Despite a year filled with challenges and uncertainty, New York remains a global hub for growth industries that Israeli entrepreneurs continue to disrupt."
Over the past six months, 10 Israeli-founded companies based in New York have achieved unicorn status: Axonius, BigID, Forter, Kaltura, K Health, Melio, Papaya Global, SimilarWeb, Talkspace, and Yotpo. They joined Gett, Monday.com, OrCam, Outbrain, Payoneer, Riskified, Sisense, Taboola, The We Company, VAST Data, and Via.
"There's no doubt that Covid-19 disoriented the investment community," Kaplowitz said. "Once investors and growth-stage companies got their bearings, and some technologies gained more relevance from the pandemic, investment activity picked up in a big way – especially in 2021."
Since the beginning of 2021, seven New York-based Israeli-founded companies crossed the $1 billion threshold. In January, Talkspace announced a $1.4 billion merger agreement with Hudson Executive Investment Corp., a special purpose acquisition company, that will take the online therapy provider public. Melio, an accounts payable tool for small businesses, closed a $110 million round to boost the company's valuation to $1.3 billion. Soon after, K Health, an AI-driven telemedicine app, announced a $132 million raise based on a $1.5 billion value.
After a brief February respite, Axonius led another unicorn charge. On March 1, the cybersecurity asset management firm, with its US headquarters located on the top floor of 330 Madison Ave., closed a $100 million funding round that cemented a $1.2 billion valuation. That same week, Papaya Global, a workforce management platform, completed a $100 million round, pushing its valuation above $1 billion. Yotpo, an e-commerce marketing platform, raised $230 million for a $1.4 billion valuation, And, most recently, Kaltura, a live and on-demand video platform service, set terms for its forthcoming initial public offering that will give the Gramercy-based company a $2 billion valuation.
These deals helped drive a record-setting first quarter for Israeli-founded companies, which raised $5.37 billion total – double the capital they raised over the first quarter of 2020.
The 2021 activity extended a late 2020 trend, when a trio of unicorns took flight. SimilarWeb, a market intelligence platform that monitors website and mobile app traffic, reached a $1 billion valuation after closing a $120 million round in October. The following month, Forter, a pioneer in fraud detection for retailers, secured $125 million, which more than doubled its valuation to $1.3 billion. And to close out the year, SoHo-based BigID, a data privacy and protection platform, completed a $70 million round that increased its valuation to $1 billion.
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"The real story here is the impact COVID-19 has made on accelerating the widespread adoption of specific technologies, such as telehealth and platforms that enable smoother remote work experiences," Kaplowitz said. "These forward-thinking companies will create more jobs at home and contribute much-needed commercial activity to a recovering local economy."
Newest Israeli-founded unicorns based in NYC:
SimilarWeb
$1.0 billion
October 2020
Market intelligence
Forter
$1.3 billion
November 2020
Fraud detection for retailers
BigID
$1.0 billion
December 2020
Data privacy and protection
Talkspace
$1.4 billion
January 2021
Teletherapy
Melio
$1.3 billion
January 2021
Accounts payable tool for small businesses
K Health
$1.5 billion
January 2021
Telemedicine
Axonius
$1.2 billion
March 2021
Cybersecurity asset management
Papaya Global
$1.0 billion
March 2021
Workforce management
Yotpo
$1.4 billion
March 2021
E-commerce marketing
Kaltura
$2.0 billion
March 2021
Live and on-demand video solutions
In 2019, when the United States- Israel Business Alliance released the findings from the first-ever New York- Israel Economic Impact Report, only five Israeli-founded unicorns maintained headquarters in New York City. Over the past year, two of those businesses shed the unicorn status by going public: Lemonade, the online insurance provider, enjoyed a scintillating debut on the New York Stock Exchange in July, and, earlier this month, Compass, the real estate tech company, also IPO-ed.
Each of the three remaining unicorns from the original 2019 list announced earlier this year a merger agreement that will take the company public via SPAC. Those deals valued Payoneer at $3.3 billion, Taboola at $2.6 billion, and The We Company at $7.9 billion.
"SPACs have introduced a new investment tool to the market that can accelerate the billion-dollar valuation while initiating a rapid transition to an initial public offering," Kaplowitz said. "In the coming months and years, we should expect blank-check companies to play a prominent role in helping the Start-Up Nation mature to the Scale-Up Nation."
