To maintain Israel’s status as a start-up powerhouse, the country must invest more in both retaining its intellectual leaders and recruiting new talent, according to leading venture capitalist Michael Eisenberg.
“In 2017, Israel is an attractive international destination for creative and bright people. It should not only be a place where Jewish refugees come,” Eisenberg told The Jerusalem Post in a recent interview.
“We are an attractive destination for technology-minded and innovative spirits and brains. As a community, citizenry, and government, we need to be investing much more dollars in that.”
Eisenberg, who made aliya from New York to Jerusalem, argued that the country could significantly benefit from absorbing an additional 100,000 Jews from around the globe, as more and more people begin to appreciate the economic opportunities. The venture capitalist was discussing the future of Israel’s entrepreneurial edge against the background of his new book, The Vanishing Jew: A Wake-Up Call from the Book of Esther, which weaves together a unique angle on the traditional Purim story with Eisenberg’s perspective as a modern Israeli innovator.
“We need to build a thriving economy and model society that people want to live in,” he said.
The Vanishing Jew, published in English on Amazon.com on February 14, tells “the untold story of Purim’s superstar Mordechai,” and his choice of wealth and assimilation in Persia over life in the Land of Israel. The English text follows the Hebrew version of the book, called Thus Shall It Be Done to the Jew, which was printed last June.
“The State of Israel and the country and the people have become over time an innovation powerhouse,” Eisenberg told the Post. “As I write at the beginning of the book, I made aliya with the intent to create 10,000 jobs here for people to earn an honest and decent living. I think that the economy sits at the center both of the State of Israel and of Purim, which is covered in the book. In the book, part of what I trace is the ups and downs of the Persian economy.”
Critical to his book was an exploration as to how the downward economy influenced Persian antisemitism and how a better economy was linked to Jewish assimilation, he explained. At the same time, in what Eisenberg described as “a parallel universe,” Ezra and Nehemiah were building up a second Jewish republic in Jerusalem.
“We have a similar situation today,” he said, pointing to the rising power of Jews in Israel and the increase in antisemitism in the Diaspora.
“The really interesting thing is that as the future of the overall economy becomes more intertwined with tech and innovation, Israel being a global center of innovation is becoming more significant and influential in the global economy,” Eisenberg continued.
One of the many global industries increasingly attracted to Israeli innovation is the German car sector, he said. Increasingly threatened by ridesharing services, automakers from the Federal Republic are “on a constant train to Tel Aviv” in search of Israeli start-up know-how, according to Eisenberg.
“Israel is a far more innovative and technological center than the Jewish communities in New York,” he added, noting that over time, the country has become to resemble San Francisco more and more.
Eisenberg has invested in some of the most successful Israeli start-ups.
He was one of the first investors in shared workspace community WeWork, customer identity management tool Gigya, cloud-based web development platform Wix, and Shopping.com, which was acquired by eBay in 2005. Today, he is a partner in Aleph VC, which has invested more than $350 million in tech firms.
Most recently, Eisenberg led a $34m. Series B investment in December in the peer-to-peer insurance company Lemonade, after a $13m. lead seed investment in the company a year before. He also led a Series A $10.5m. investment in the smartphone dashcam app Nexar in June 2016, after a $4m. lead Series A investment in the company in May 2015.
“We have a core thesis, and our core thesis is that data and software are going to run many traditional industries,” Eisenberg said.
For Nexar, this means running the automotive industry, while for Lemonade, the insurance industry, he explained.
Another start-up, Freightos – which received $14m. Series B investment in September 2015 and a $4.6m. lead Series A investment in March 2014 – is changing the face of global freight, according to Eisenberg.
WeWork, which he described as a “software business with four walls,” is catering to the global urbanization trend, in which people are moving to cities but crave office interactions.
“We are a more collaborative economy of small companies than ever before,” he said.
As the Start-Up Nation continues to grow, Eisenberg stressed the importance of bringing in Jewish talent from outside of Israel to come help build up the innovation scene.
“I think we’re in phase transition from Start-Up Nation to Scale-Up Nation,” Eisenberg said. “And that phase transition is going to mean more big companies are created out of Israel and we’ll need more and more management talent here in order to supply that. I think we’ll see bigger and bigger companies like Wix, which I was fortunate to be involved in, growing out of Israel.”