California is home to the largest number of Israeli-founded unicorns of any US state, after 17 privately held Israeli-founded companies reached or surpassed a $1 billion valuation over the past year, boosting the state’s unicorn count to 32, according to the latest report by the United States–Israel Business Alliance (USIBA). Last year’s tally counted 22 tech unicorns founded by Israelis in the Golden State, seven of which have since gone public.
The organization released a report Wednesday detailing the Israeli unicorn scene in New York City, now home to 26 such companies.
In its California report Thursday, USIBA said the vast majority of Israeli-founded tech unicorns were in the Silicon Valley region, and that the total number of 32, according to the latest tally, represented an unprecedented cluster of Israeli-founded unicorns in a single state.
Each of these companies has at least one Israeli founder and maintains its global or US headquarters in California.
“When you tell someone that there are 32 Israeli-founded companies worth $1 billion or more, you’ll be met with a look of amazement,” said USIBA president Aaron Kaplowitz in an email message accompanying the report. “When you clarify that those 32 companies are in California alone, the wonder quickly turns to disbelief.”
“I know this is a common refrain, but Israel is still a small country,” Kaplowitz told The Times of Israel by text message on Thursday. “So for these entrepreneurs to go to Silicon Valley, the heart of global tech innovation, and become further and further entrenched in the ecosystem there is really a testament to the brilliant companies they’re building.”
“And keep in mind: this report only tracks the unicorns. There are hundreds of smaller Israeli-founded startups all over California that could show up in next year’s report. All of this activity translates into a critical mass of economic impact,” he added.
The 32 unicorns in California represent about a third of all current Israeli unicorns. According to Tech Aviv, which tracks the industry in Israel, as of April, there were 92 Israeli-founded unicorns with a combined value of over $255 billion. Of these, 36 had their headquarters in Israel with others in New York, Silicon Valley, Boston, London, Singapore, Chicago, and Los Angeles.
Among the 17 new tech unicorns added since last year were business management software company HoneyBook, which raised $250 million in November, six months after raising $155 million and becoming a tech unicorn in May; cybersecurity startup Salt Security, which pulled in a new investment in February of $140 million led by CapitalG, the independent growth fund of Google parent company Alphabet; Viz.ai, a developer of an AI-powered stroke detection and care platform, which became a unicorn just this month after nabbing a new $100 million investment; Wiliot, a maker of battery-free Bluetooth-based chips to tag onto consumer-packaged goods that raised $200 million last year in a round by SoftBank’s Vison Fund 2; data architecture startup Firebolt, which became a unicorn in January after raising $100 million; and Big Panda, a data science platform for IT alerts that raised $190 million in January and is based in Mountain View.
Cybersecurity company Cato Networks, valued at more than $1 billion, is also on the list, after relocating from Alpharetta, Georgia, to San Jose.
These companies join payroll and compliance platform startup Deel, travel tech company TripActions, accounts payable fintech firm Tipalti, cybersecurity startup Wiz, and payments platform Rapyd as some of the California-based companies already on the USIBA list from previous years, and whose valuations have shot up over the past year. Deel’s value went up from $1.3 billion in April 2021 to $5.5 billion today; Wiz is valued at $6 billion, up from $1.3 billion in under a year, according to the report.
California also lost several Israeli-founded unicorns to IPOs including insurance tech company Hippo; Innoviz, a maker of sensors for self-driving cars; and cybersecurity company SentinelOne
Cloud security company Orca Security, which increased its valuation from $1.2 to $1.8 billion, outgrew its Los Angeles office and moved to Portland, Oregon in December, according to the report.
In San Francisco specifically, Israeli-founded tech unicorns increased from eight last April to 12 this year. The city now has the second-largest group of Israeli-founded unicorns in US cities after New York (and outside of Tel Aviv).
2021 was a record year for Israeli tech companies, with over $25 billion in raised funding, as well as close to 200 tech exits (including mergers and acquisitions and IPOs), shattering all previous records.
However, many of the companies that listed their shares publicly have since taken a battering, with tech valuations tumbling in recent months
Analysts have warned of a market correction in 2022.