When an Israeli start-up wants to expand to the United States, its first step is often to open an office in New York. There are direct flights and the time difference is less than setting up a shingle all the way in Silicon Valley.
That’s turning out to be good business, too – for New Yorkers.
Israeli-founded companies in New York directly contributed $18.6 billion in revenue in 2018 to the New York State economy, according to a new study conducted by the New York – Israel Business Alliance.
If you factor in additional spending on goods and services in New York, the total jumps to $33.8 billion. That works out to a total of 2 percent of the state’s Gross Domestic Product.
All told, there are 506 Israel-founded companies in New York State. They employ 24,850 New Yorkers directly, the study says, and another 27,502 indirectly when accounting for the additional demand for local goods and services. Between 2016 and 2018, Israeli-founded businesses added new jobs at double the state’s rate (2.5 percent job growth vs. 1.2 percent for the state).
When it comes to investment, Israeli-founded companies operating in New York raised $3.5 billion between 2014 and 2016 and were responsible for more than 20 percent of the total capital raised.
“For anyone who has spent time in New York over the past decade, it’s evident that Israeli businesses are flourishing here,” said Aaron Kaplowitz, founder of the New York – Israel Business Alliance.
Not surprisingly, Israel’s presence as an entrepreneurial powerhouse is most evident in New York City where “it’s nearly impossible to walk a block without encountering [Israel’s] influence.”
A lot of the revenue, investment, and job growth is coming from five Israeli-founded unicorns – start-ups valued at $1 billion and up. These included real estate tech start-up Compass, co-working space giant WeWork, insurance tech startup Lemonade, financial services company Payoneer, and content discovery and advertising platform Taboola.
The new report also found six key areas of economic compatibility between Israel and New York: agriculture, artificial intelligence, cybersecurity, drones, life sciences, and renewable energy.