V Israeli fintech company Rapyd lost $50 million (£37.7million) this year in the wake of Gaza protests, experienced riots outside its Europe offices and saw clients pulling out. 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 last week’s annual Mind The Tech London conference, organised by Israeli business website Calcalist.

The company moved to profitability this year 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 of people who don’t want to work with you, because of who you are. So, you don’t want to work with them either.”

Israeli tech propelled the economy before October 7 and in wartime they 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 the sector has been hit by worker shortages and funding shortages 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 last week in the City for the Mind The Tech London conference, an event dominated by the tragedy of October 7 but invigorated by the need to drive the Israeli economy forward. 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 Almog’s mother, Eynav Levy – Or’s wife – was killed at the Nova festival massacre.

“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, 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” the figures were “surprisingly positive,” Esteron said, 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.”

Nir Zuk, co-founder of the $91 billion cyber security firm Palo Alto Networks, 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 in Israel is booming. For instance, Google sought to acquire Israeli cloud security startup Wiz earlier this year for $23billion. As of September 2024, CyberArk boasts a market cap of $11.79billion, while Silverfort’s estimated valuation ranges between $464 million and $696 million .

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. 

Friedman described the new initiatives aimed at addressing the challenges of war as “modern Zionism”. “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, said: “Most 18-to-24-year-olds worldwide hold either very negative or non-existent views about Israel”, pointing to the failure of hasbara. Israel’s long-term goal, he said, must be to be “a country that is a welcome member of the international community”.