Do unicorns (companies with a valuation of $1 billion or more) prefer the east coast, or the west coast? Either way, the US's two biggest cities are hosting record numbers of unicorns founded by Israelis.
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A record 26 Israeli-founded unicorns now have their global or US headquarters in New York City, the United States- Israel Business Alliance reports. In fact, outside of Tel Aviv, New York continues to be the city with the most Israeli-founded tech unicorns in the world. All 26 tech companies are concentrated in Manhattan.
"New York supplies strategic resources that no single city can truly match," USIBA president Aaron Kaplowitz says. "It offers access to seemingly endless sources of capital, a well-traveled path to the rest of America and global markets, a highly sophisticated workforce, cultural synergies – the list goes on.
"But in interviews we conducted with Israeli founders over the past year, many expressed deep frustrations trying to navigate the global travel disruptions that have arisen during the pandemic," Kaplowitz said. "The New York metropolitan area is the only place in the country with two airports that offer direct flights daily to Tel Aviv, so from the perspective of the executive who needs to travel back and forth frequently, New York has even more appeal."
Since last April, when USIBA issued its 2021 Unicorn Report, New York City has added 14 Israeli-founded unicorns. Half of these newly-minted unicorns earned their wings during the fourth quarter: Augury ($1 billion), Fabric ($1 billion), Hibob ($1.65 billion), Immunai ($1 billion), OpenWeb ($1.1 billion), Selina ($1.2 billion), and Veho, which recently relocated to the Big Apple from Boulder, Colorado and quickly saw its valuation jump from $1 billion in December 2021 to $1.5 billion in February 2022.
Verbit, the AI-powered transcription and caption platform, closed a $157 million round in June, at a $1 billion valuation, and followed in November with a $150 million round that doubled its valuation to $2 billion. Similarly, Claroty, a cybersecurity company that moved its headquarters from Tel Aviv to Manhattan in 2017, secured a $1 billion valuation in June and raised an additional $400 million to almost double its value to $1.95 billion in December.
In July, AnyVision completed a $235 million round based on a $1 billion valuation and shortly thereafter changed its name to Oosto. The facial recognition technology start-up is headquartered across the street from the Empire State Building.
Capitolis ($1.6 billion) and Cheq ($1 billion) crossed the billion-dollar valuation threshold during the first quarter of 2022. The addition of two new unicorns represents something of a slowdown compared to the same period in 2021, when seven Israeli-founded companies joined the club.
Fireblocks and Pagaya rapidly increased their respective valuations and are both currently among the top ten highest valued Israeli-founded unicorns in the world. Fireblocks, the digital assets platform, notched a $1.9 billion valuation in July 2021, and then rode the cryptocurrency wave to raise another $550 million. That latest funding round more than quadrupled its post-money valuation to $8 billion in only six months. Pagaya, an AI-powered lending network, neared unicorn status in 2020 and then blew past the billion-dollar milestone when it announced in September that it would be going public through a merger with EJF Acquisition Corp., a special-purpose acquisition company, based on an $8.5 billion valuation.
"After more than two decades of the best and brightest Israeli tech leaders grappling with the temptations of exiting early, we're now seeing a maturation in the ecosystem," Kaplowitz said. "Many of those wide-eyed founders from 20 years ago are now serial entrepreneurs and investors who have gained the confidence and patience to no longer settle for $20-$60 million exits. That is having a top-down effect on the entire ecosystem." In addition to adding new unicorns, New York City also lost nine Israeli-founded unicorns to public listings: Kaltura (NASDAQ: KLTR), monday.com (NASDAQ: MNDY), Outbrain (NASDAQ: OB), Payoneer (NASDAQ: PAYO), Riskified (NYSE: RSKD), Similarweb (NYSE: SMWB), Taboola(NASDAQ: TBLA), Talkspace (NASDAQ: TALK), and WeWork (NYSE: WE).
Among the remaining 12 so-called "veteran" Israeli-founded unicorns based in New York, seven increased their valuations during the past year: Axonius (from $1.2 to $2.6 billion), BigID (from $1 to $1.25 billion), Forter (from $1.3 to $3 billion), Melio (from $1.3 to $4 billion), Papaya Global (from $1 to $3.7 billion), Vast Data (from $1.2 to $3.7 billion), and Via (from $2.1 to $3.3 billion). Gett, the ride-hailing platform that announced in November it would merge with a SPAC and go public, saw its estimated valuation drop from $1.5 to $1.1 billion.
"When we started tracking Israeli-founded unicorns in 2018, New York had five and we thought that was a tremendous number," Kaplowitz said. "Now that we're at 26 we've had to recalibrate our thinking on Israelis' contributions to the local economy and all the jobs these massive companies are creating."
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And what about the Golden State? A total of 32 Israeli-founded unicorns have global or US headquarters in California, the USIBA reports. Over the past 12 months, the Golden State has added 17 unicorns, the vast majority of which are in Silicon Valley. The 32 total companies form an unprecedented cluster of Israeli-founded unicorns in a single state.
"When you tell someone that there are 32 Israeli-founded companies worth $1 billion or more, you'll be met with a look of amazement," Kaplowitz says. "When you clarify that those 32 companies are in California alone, the wonder quickly turns to disbelief."
Over the past year, 16 companies reached or surpassed the billion-dollar valuation threshold: At-Bay ($1.35 billion), Big Panda ($1.2 billion), Cloudinary ($2 billion), Exabeam ($2.4 billion), Firebolt($1.4 billion), Hailo ($1.1 billion), Honeybook ($2.4 billion), Noname Security ($1 billion), Placer.AI ($1 billion), RapidAPI ($1 billion), Salt Security ($1.5 billion), SpotOn ($3.2 billion), Sunbit ($1.1 billion), Veev ($1 billion), Viz.ai ($1.2 billion), and Wiliot ($1 billion).
California picked up an additional unicorn when Cato Networks ($2.5 billion), a company valued at more than $1 billion since November 2020, relocated its headquarters from Alpharetta, Georgia to San Jose.
Ten of the other 15 Israeli-founded unicorns in California increased their valuations since April 2021, when USIBA issued its last Unicorn Report: Armis (from $2 to $3.5 billion), Deel (from $1.3 to $5.5 billion), Dremio (from $1 to $2 billion), Gong (from $2.2 to $7.25 billion), Gusto (from $3.8 to $9.5 billion), Redis Labs (from $2 to $4 billion), Tipalti (from $2 to $8.3 billion), Trax (from $2.3 to $3 billion), TripActions (from $5 to $7.25 billion), and Wiz, the Palo Alto cybersecurity darling that increased its valuation from $1.7 billion to $6 billion in less than six months.
Fundbox, a credit start-up, explored a special purpose acquisition company merger based on a $1.5 billion valuation in 2021. The merger did not materialize and Fundbox closed a $100 million round in November at a $1.1 billion value.
Rapyd, the Mountain View-based payments platform provider, took the biggest leap since last April, with its valuation increasing sixfold, from $2.5 to $15 billion. Founded in 2016, Rapyd has raised $770 million total and is the highest valued Israeli-founded unicorn in the world today.
"The Israeli-founded companies in Silicon Valley are raising eye-popping funds," Kaplowitz said. "But, as far as impact goes, those dollars pale in comparison to the number of local jobs these companies create and the revenue they bring to their communities."
California also lost six Israeli-founded unicorns to initial public offerings: Hippo (NYSE: HIPO), Innoviz (NASDAQ: INVZ), ironSource (NYSE: IS), Otonomo (NASDAQ: OTMO), SentinelOne(NYSE: S), and WalkMe (NASDAQ: WKME). Orca Security, which increased its valuation from $1.2 to $1.8 billion last year, outgrew its Los Angeles office and, in December, moved to Portland, Oregon.
San Francisco saw its Israeli-founded unicorn total rise from eight last April to 12 today and now boasts the second-most Israeli-founded unicorns among US cities.
