Last night, the US Israel Business Council invited eight Israeli start-ups to present their business plans to American investors and technology executives at a “roadshow” event in lower Manhattan.
There was a reason, beyond convenience for money men, that the event was hosted deep in the heart of New York’s financial center: Many of these start-ups will be based here. In a sharp break from years past, which saw Israeli tech companies attempting to conquer North America from Silicon Valley, the latest wave of Israeli entrepreneurs is increasingly pitching up on the East Coast, and specifically in New York City.
Ami Gal, CEO of Sqream Technologies, a data-crunching operation, was chosen by the audience as one of the two most promising start-ups in the line-up. His presentation included a slide headed, “NYC or Silicon Valley?” After the presentation, I asked him to explain his thinking. “New York City is definitely the place to be in terms of customers, in terms of access to finance,” he replied, even though Silicon Valley still has the edge in terms of venture capital. But he added that there is another major advantage for Israeli entrepreneurs in New York: Its relative proximity to Israel. “A small company needs to be able to work together,” he said, “It’s much easier to get from Israel to NYC. It’s five hours from Israel to NYC, but you have to take an overnight flight to get to Silicon Valley.”
Tal Kerret, the chief investment officer of Silverstein Properties, told me that the city has worked to offer other draws beyond geography, Jewish and physical. Under Mayor Bloomberg, he noted, New York worked hard to make itself attractive to technology startups—and specifically to build links with Israel. The Technion is building a joint campus with Cornell University on Roosevelt Island, slated to open in 2017 and is already accepting applications for a master’s program at its temporary location—in Google’s Chelsea headquarters.
That is key to replicating the chief advantage Silicon Valley used to hold: Proximity to labs, like Stanford, and to potential partners, as well as competitors. “It used to be that your product could have time to mature, to get its bar mitzvah,” Kerret joked. “Now it’s more important to be fast.”
For those who can, the answer is to have it both ways. Yaron Hadad, CEO of Nutrino, an app company that helps users maintain their diets, is based in New York, but his partner is based near Silicon Valley. But the New York part of the equation is critical, he said, because of ready access to capital. “Funding opportunities in New York are significantly better than any other place in the world,” he told me.
Editor’s note: This post has been updated to reflect Kerret’s current role at Silverstein Properties.