Israeli fintech company, Rapyd, lost $50 million this year in the wake of Gaza protests, amid riots in its Europe offices and clients pulling out of their work. But CEO and co-founder, Arik Shtilman, is not perturbed.

“We can withstand anything. We are not concerned. We understand it is part of the cost of doing business as an Israeli company,” Shtilman told the JC at the annual Calcalist Mind The Tech London conference this week.

This year, the company moved to profitability for the first time and “at least half” of the post October 7 losses have been recovered.

Not all Israeli companies have been so defiant, but Shtilman is standing firm. “We are not going to hide that we are Israeli,” he said.

“You should not be afraid and you should be willing to take the heat of losing revenue because people who don't want to work with you because of who you are. So, you don't want to work with them either.”

Rapyd CEO and co-founder, Arik Shtilman, at Calcalist's Mind the Tech conference in London (Photo: Calcalist)

Israeli tech propelled the economy before October 7, but in wartime, tech firms have an even keener sense of responsibility.

The sector, which became a global powerhouse in the last decade, accounts for almost half of all Israeli exports and a fifth of its economic output. The start-up nation is home to the largest number of tech companies after Silicon Valley and has the highest density of startups per capita in the world.

But high-tech has been besieged by worker shortages and funding fears, as foreign investors have pulled out as a result of the war and concerns over boycott divestment sanctions (BDS).

For Shtilman, the future lies in expanding further into the Middle East, with Saudi Arabia in his sights. “I’m optimistic,” he told the JC, hinting at the company’s next move.

Rapyd was the first regulated Israeli company to establish operations in the UAE following the Abraham Accords and Shtilman said it was the country “where we got the most support after October 7".

He said: “The local people that we work with there, the regulators, government officials, all of them were very supportive. We have Israeli staff on the ground in the UAE, and they never thought for one second to leave the country after October 7. We have had amazing support from the country and the regime, and we are very confident it is a long-term thing.”

Leaders in the industry came together this week in the City for the annual Calcalist Mind The Tech London conference, an event dominated by the tragedy of October 7 and invigorated by the need to propel the economy. Many hoped to use London as a springboard for some of their innovations.

Michael Levy, an Israeli tech manager and the brother of Israeli hostage Or Levy, opened the conference, telling the room: “In a different reality I would be here wearing a different hat, talking about anything but this.”

He added: “Watching my three-year-old nephew, Almog, celebrate his birthday without his parents was one of the saddest moments of my life.” He then recounted how Or’s wife and Almog’s mother, Eynav Levy, was killed at Nova festival.

“The world keeps turning, the stock market rises and falls, and life goes on, but for me and the families of too many others, life has stopped, time has frozen, my brother is gone and reality is unbearable. We must bring him home, we must bring all of them home,” he said.

Levy appealed to the tech community: “We need you, the most influential people in the economy, you have the power to create real change, you have the ability to make something happen, we need your help, we cannot be left behind.”

With Levy’s words echoing, Yoel Esteron, founder of the tech website Calcalist, said: “Israel needs a strong and agile economy during this war and to continue to prosper.”

After the initial setback of war, leaders discussed dealing with protests against Israeli firms, as well as reduced interest from some investors but said the industry was resilient and had received increased interest from other streams. Being successful is the only option for Israeli tech – bouncing back to support the economy and make the case for Israel on the international stage.

“Israel is under severe and toxic attacks in many countries, and while we cannot deny this may be affecting the tech sector,” Esteron said the figures were “surprisingly positive,” with total fundraising “reaching $7.8 billion and Israeli tech hitting $11.6 billion in sales”.

“Israeli tech giants have grown even stronger in 2024... The war continues and our challenges are enormous, [but] the tech sector is recovering and is stronger.”

Co-founder of the $91 billion cyber security firm Palo Alto Networks, Nir Zuk, said that Israeli tech was one of the best value investments: “I am bullish on the tech industry in Israel, there’s a lot of opportunities here. Israel has some of the best entrepreneurs in the world and some of the best engineers.”

Pointing to cyber security and fintech, as well as innovations in military and healthcare technologies, Zuk said: “There’s a lot of money to be made.”

The founder, who returned to Israel from California during the pandemic, has invested more than $100 million in Israeli companies. Israeli tech, according to Zuk, is valued lower than its American and UK counterparts, making it attractive for foreign investors: “Right now, the valuations are very good because of the situation.”

This is also a challenge, according to the billionaire founder. “We need more money. Some investors are a bit worried about investing in Israel,” he said.

But in cyber security, the very factors that deter some investors create opportunities for others; the industry is booming, with Israel at its core. For instance, Google sought to acquire Wiz earlier this year for $23bn (£18bn). As of September 2024, CyberArk boasts a market cap of $11.79bn (£8.88bn), while Silverfort's estimated valuation ranges between $464m (£350m) and $696m (£524m).

Hanan Friedman, president of Bank Leumi, attributed the success of Israeli tech to the nation’s entrepreneurial culture, honed by everyone’s time spent in the IDF. “The entrepreneurial spirit of these young people that has helped them deal with complex situations” is the same spirit that makes Israeli high-tech flourish, he said.

Friedman described this innovation as "modern Zionism," referring to new initiatives aimed at addressing the challenges of war.

“Israeli high-tech will always create much better and much faster because, no matter what, a real-time solution must be found… The main reason why Israelis are experts in solving problems is because we don’t have any other choice.”

Yet, despite Israel’s technological prowess, the country’s global image has suffered. Simon Anholt, author of The Art of Nation Branding, addressed the crowd with a sobering observation: “Most 18-to-24-year-olds worldwide hold either very negative or non-existent views about Israel.”

Many, Anholt noted, “increasingly think it should not even be here,” pointing to the failure of Hasbara.

Branding expert Simon Anholt at Calcalist's annual London conference (Photo: Calcalist)

For Anholt, Israel’s long-term goal must be to reshape itself into “a country that is a welcome member of the international community”. The issue, he explained to the packed room, “isn’t that people don’t like Israel. It’s that they don’t want to like Israel.” This, he emphasised, is a critical turning point. “The direction we must turn is to become a normal country.”

Anholt’s vision is ambitious: to ignite a “national movement” aimed at repairing Israel’s image on the world stage. It’s a challenge many at the conference seemed eager to take on.

One such initiative that could assist Israel’s image on the international stage is the country’s innovation in healthcare. Dr Edi Itelman from Beilinson Hospital shared his research on integrating artificial intelligence (AI) into cardiology, exploring whether large language models could assist in decisions about heart valve replacements.

AI correctly identified the need for surgery in 100 per cent of trial cases, according to Itelman. While the technology isn’t ready to replace doctors, Itelman sees it as “a decision support tool to reduce the cogitative load on physicians”. He said it could empower patients too, by providing a “quick consultation or even a second opinion”.

As Israeli tech continues to push boundaries in cyber security, military, medicine and finance, its leaders are not just reshaping industries, they're navigating geopolitics.

As these entrepreneurs look beyond borders, fueled by necessity and ambition, they are forging new relationships and redefining Israel’s role on the world stage.