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Israel's bustling high-tech startup scene
Israel's bustling high-tech startup scene
Keren Tsuriel Harari

TEL AVIV — Frida Issa knew from the age of 11 that she’d one day work in the world of computers. But it was with her first job at a Tel Aviv startup that she first nurtured ambitions to do something on her own — and something built for the future.

“We’re not into building a startup, work for two years, sell it and that’s it,” Issa explains. “We want to do something with technology that will last, and that’s tougher.”

She is a 31-year-old Arab entrepreneur who hopes to succeed against all odds.

“There’s nowadays an awakening of young Arabs around technology,” she says. “In my community, they had always encouraged you to stick to something established. So entrepreneurship is a new thing.”

And indeed, an Arab high-tech professional, once an esoteric thing within a minority society that cherished steady employment, is now part of the mainstream, joining the wave of young Israeli Arabs, who like their peers around the world caught the techy bug and are now dreaming big.

Based in Spain, Issa and her husband are now building their second technology venture, having grown from just the two of them into 30 employees. In the past 18 months alone, they have generated more than two million euros in revenue.

They hope that Mally, their mall navigation app, could pave the way for work in more countries. “We’re already working with three malls in Spain, and we’re in contact with 15 more with an eye to signing contracts,” Issa says. “We’re still funding ourselves because investors in Israel want to see customers and profits before they invest.”

There is still no solid data on the numbers of Israeli Arabs in Israel’s high-tech sector, but all agree that an increasing number of Arab youth are studying science and technology, with an eye to prospects in the digital sector.

The prestigious Technion Institute of Technology prides itself on turning out 70% of the founders and executives in the Israeli high-tech industry, and 20% of the students in this Haifa-based university are Arabs.

According to data from the Israeli Central Bureau of Statistics (CBS), the number of Arab students who studied science and technology in universities spiked 260% between 1990 and 2012.

Karin Mayer Rubinstein, CEO of the Israel Advanced Technology Industries organization, believes the industry is poised for growth. “There are about 100 startups with an Arab entrepreneur or under Arab ownership, 1,500-1,700 Arab employees in the entire sector, and 100 million shekels (about $28.7 million) invested to this day in Arab companies, which is not bad,” she says. “Something is moving.”

A veteran in the high-tech business already at the age of 44, Hans Shakur believes there are more than 5,000 Arabs working in the sector. “The scene is evolving, and it’s quite exciting,” he says.

Good intentions

Shakur knows everyone within the Israeli high-tech scene, Arabs and Jews, and pretty much everyone I asked knows him too. He was born in Acre and returned two years ago, before his elder son was born and after 12 years of living in Tel Aviv’s upscale north.

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In the Technion Institute for Science, Haifa — Photo: Beny Shlevich/GNUFDL

He currently owns Markitect, a company that works with mobile and Internet content, and develops apps. It now has five employees — three Arabs and two Jews. Shakur is simultaneously involved in two startups and consults for entrepreneurs.

A year ago he decided to bring to Nazareth what any other city in the world full of geeks has — MobileMonday. The 14 events he organized with colleagues last year have attracted hundreds of participants, Arabs and Jews alike, as well as guests from companies like Nokia, Waze, uTest, GetTaxi and Orange. “A number of startups emerged there. People found employees, employment or partners,” Shakur says.

In 2007, after a few years in Silicon Valley, Roni Floman returned to Israel and started consulting with startups and high-tech companies. She began developing the idea of writing a book about Arabs in the high-tech sector after meeting with Smadar Nehab, Tsofen’s executive director, and Jimmy Levy, who just established Galil Software.

The result, Good Intentions, is no standard business book. For three years Floman followed young entrepreneurs, veteran high-tech experts, and Arab businessmen, not to mention initiatives that encourage integrating Arab employees in the high-tech industry. She compliments some, and criticizes others.

The book includes success stories alongside others that end with a feeling of compromise and acceptance. Just like in life. And the business stories the book describes are intertwined with personal and family stories, including some politically loaded ones.

“To be an entrepreneur, one has to be a bit nutty, to cling to something with insane optimism,” she says. “You take nothing and make it into a startup.”

According to CBS data, an employee in a technology-related position has an annual average income of 249,000 shekels (about $71,000), 2.3 times more than the average, and 3.5 times more than the average of an Arab employee.

Arabic content

But beyond the individual benefits for Israel’s Arab citizens is the broader payoff for the nation’s economy. “Arabs are 20% of the population, and they contribute 8% to the GDP,” says Al Bawader's Jimmy Levy. “If they doubled their contribution, the Israeli economy would gain 40 billion shekels ($11.4 billion) a year more. That’s a lot of benefit for everyone.”

Still he concedes bluntly: “Being an Arab entrepreneur or professional in this country is really not easy.” Encouraging Arab high-tech requires more investment in education, in networking infrastructure. And most of all, Levy would like to see Israeli companies expanding to the country’s north. “The northern region has a huge pool of talent, Technion alumni, and it would be great if these companies employ these talents.”

Amir Hayek might be an example. The 29-year-old didn’t wait to complete his computer science studies at the University of Haifa before starting work in the high-tech industry, for a Tel Aviv-based mobile startup.

At the Startup Weekend in Haifa, he developed a file-scanning app with a friend, Alaa Shehebar. “We were the only two Arabs, and you feel your chances are slimmer because the Jews have more self confidence, which I didn’t have it at the time,” he recalls. “But we developed the app GetSlide there and won the second place.”

His dream now it to start a company that would combine the things he likes. “Maybe I will start a local gaming company that would develop games for our region and will combine a message and art.”

Hayek points to an interesting niche. Today there are 100 million Arabic-speaking Internet users, 20 million more than two years ago. But only 1% of the content online is in Arabic. This could be a major opportunity for Arab high-tech entrepreneurs since a lot of money goes into this niche.

“Many foreign funds that invest in Israel are looking for companies that produce content and websites in Arabic.”

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