The Europeans don’t have the same venture capital mindset as Americans, and the EU is a much more complicated player when it comes to Israeli high tech.
By Yakir Benzion, United With Israel
When it comes to investing in Israeli high tech and looking at success stories of Israeli startup companies outside of the Jewish state, everybody knows that America is the main mover while the European Union is lagging far behind, The Jerusalem Post noted in an article on Monday.
“Let’s do a little thought experiment. If I ask you for a great Israel success story on the U.S. market, what comes to mind?” asked Ido Alon, Director of Strategy & Change at the Israeli office of the European-based international accounting giant KPMG, the Post reported. “Maybe one of the huge company acquisitions that have been made, or a big IPO. There are many examples.”
“Now what if I ask you to think of an Israeli success story in the European Union? Most people can’t think of any,” Alon told an online workshop this week funded by the European Commission that looked for ways to strengthen EU-Israel business connections, the article continues.
The EU is a huge market with 500 million citizens and a booming trade relationship with Israel, importing some 40 billion Euros from Israel and exporting 20 billion Euros in goods in return, but the EU has not made much of a dent in Israeli high-tech. There are 79 Israeli companies on the NASDAQ stock exchange, but only a handful on European exchanges, the Post reported.
Alon produced a report recommending how Europe could up its game and be a bigger player in Israel, pointing to three steps: investment, information and boots on the ground.
He said that while 230 American companies have invested in setting up research and development centers in Israel, only about 50 European corporations have done so, adding that “hundreds of European multinational companies could benefit from partnering with Israeli firms.”
With EU authority for trade and investment designated to many different branches, Alon suggested the Europeans would need a single online platform where EU businesses can access all information about Israeli companies. As well, the Europeans should invest in increasing the awareness of Israeli startup success stories in Europe.
He said the Europeans need people on the ground if they want to do business with Israel’s small- and medium-sized enterprises, but they could use local Israeli “scouts” who can be the matchmakers for multiple firms and find worthwhile collaborations.
“As with any strategic plan, there is the possibility of failure, and there are a lot of people that we have to get on board with the program” in order to change things between Europe and Israel, Alon said, according to the Post. “That’s why we are focused on getting some quick wins that will create momentum quickly. We’ll see from there.”
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