In mid-December, weeks before Minister of Justice Yariv Levin presented his judicial reform plan, Shlomo Kramer, one of Check Point's founders and a prominent Israeli cybersecurity entrepreneur, warned participants at the "Globes" startup conference about the damage that changes in the judicial system would do to the country's tech sector.
In the following days, even before the new government was formed, it was Israel's senior venture capitalists who were among the leaders of the protests. The high-tech" petition was the initiative of Qumra managing partner Erez Shachar, which was swiftly adopted by other senior venture capitalists Vintage Investment Partners founder Alan Feld, TLV Partners's Rona Segev, Pitango's Chemi Peres and Mellanox founder Eyal Waldman, who today is investing in his own fund.
Subsequently Disruptive VC general partner Tal Barnoach stood out by declaring that the capital for his next fund would be kept in foreign banks. Insight Partners managing director Liad Agmon brought his partners from the US to publish declarations supporting the protests and Bessemer Venture Partners Israel manager Adam Fisher sent a letter to its entrepreneurs in Israel recommending that they reduce their exposure to the shekel.
All the eggs in the Israel basket
Although CEOs of Israeli unicorns and publicly traded companies are taking an active part in the protests, it seems that venture capital partners, who have always kept their distance from the mainstream media, today serve as the main engine of the protest against the judicial reforms.
The venture capitalists manage funds that raise their money from investors in Europe and the US and invest it in Israeli companies. Because of this, they have a lot to lose. Unlike Israeli tech companies, which sometimes hide behind international brands, Israeli venture capitalists raise money on the Israeli ticket, under the "Startup Nation" brand. There are Israeli funds that also invest overseas - such as JVP or 83North, but in most cases the Israeli venture capital funds put all their eggs in the Israeli basket.
The venture capital partners manage the money of foreign investors and operate almost exclusively in Israel - which is why they are the first to cry out. They have been joined by portfolio companies, startups and privately-held unicorns, as well as publicly-traded Israeli companies, but only to a relatively small extent. Unicorn executives that have made their voices heard include those at Wiz, Papaya Global, Reddis, Forter and Appsflyer. Contrary to expectations, publicly-held companies that depend on foreign funds, such as Fiverr, Lemonade and Kaltura, are also making their voices heard even more loudly.
Tech giants stay silent
Not everybody has joined the protest. monday.com, for example, one of the biggest publicly-traded companies in Israel's tech sector, has declined to comment on the subject. Co-CEO Roy Mann refused to sign the high-tech petition, although the company does provide free access to its online work tools to protest organizations planning and managing demonstrations and activities.
Both Palo Alto Networks and Check Point, two companies that keep well clear of politics, and have interests in Israel including supplying the government with software, have remained silent.
And finally, the development centers of the global tech giants have also remained silent - especially Google, Amazon and Microsoft, which all have contracts with the state. But in private, the managers of these development centers harshly condemn the situation. "Every time a missile falls on us, we have to convince them that there is value in having a development center in Israel. This legal reform does not make our job any easier," said an executive at one of the companies.
An exception who has spoken out is Facebook Israel general manager Adi Soffer Teeni. She signed a letter published by Alan Feld of Vintage Investment Partners that calls for an immediate halt to the judicial reform and talks on the matter. At the same time, you will not find Soffer Teeni at a protest demonstrations or even in a Facebook post on the subject. The tech giants are wary of protests and internal disputes, including their Israeli managers who are committed to a diplomatic approach.
Published by Globes, Israel business news - en.globes.co.il - on February 21, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.