California now home to 22 Israeli-founded tech unicorns

5 privately held Israeli-founded companies in California reached or surpassed a $1 billion valuation just this year, a bilateral group reports

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

The JCC in Palo Alto, California, holds an Israeli Independence Day celebration in Hebrew aimed at the vibrant Israeli community in Silicon Valley on May 9, 2019. (Saul Bromberger/Courtesy JCC Palo Alto)
The JCC in Palo Alto, California, holds an Israeli Independence Day celebration in Hebrew aimed at the vibrant Israeli community in Silicon Valley on May 9, 2019. (Saul Bromberger/Courtesy JCC Palo Alto)

California is home to the largest number of Israeli-founded unicorns of any US state, after five privately held Israeli-founded companies reached or surpassed a $1 billion valuation in this year, boosting the state’s unicorn count to 22, according to the United States – Israel Business Alliance (USIBA).

Each of these companies has at least one Israeli founder and maintains its global or US headquarters in California.

“The numbers are wild,” USIBA president Aaron Kaplowitz said in an email text message accompanying the USIBA statement. “California continues to attract many of the best and brightest innovators in the world,” he added. “We’re seeing today a new generation of Israeli entrepreneurs contribute to northern California’s innovation ecosystem and benefit from a deep bench of venture capitalists.”

These unicorns are all located in Silicon Valley, except for Orca Security, a cybersecurity firm for cloud-based assets. In March, the Los Angeles company closed a $210 million round at a $1.2 billion valuation.

Aaron Kaplowitz, president of the US-Israel Business Alliance (USIBA)

Eight Israeli-founded unicorns headquarter in San Francisco, the most of any US city behind New York, the statement said. Deel, with its office just beyond Oracle Park baseball field, is the most recent addition to the unicorn club. Last week, the payroll and compliance platform startup announced the completion of a $156 million funding round, driving its valuation to $1.25 billion. Deel has raised $206 million total – all in the past 11 months.

Less than a mile away, ironSource, an app monetization and distribution firm, recently announced plans to go public through a special purpose acquisition company. The agreement with Thoma Bravo Advantage pushes the company’s value to $11.1 billion.

Trailing San Francisco, Palo Alto now has seven Israeli-founded unicorns, including insurance firms Hippo, valued at $5 billion, and Next Insurance, at $4 billion. On March 22, Wiz closed a $130 million round, valuing the firm at a whopping $1.7 billion just three months after emerging from stealth.

“Silicon Valley lives by the ‘move fast and break things’ mantra,” Kaplowitz said. “The Israelis, of course, have a word for that: chutzpah.”

Mountain View is home to Rapyd, valued at $2.5 billion, and SentinelOne, at $3.1 billion.

Database management innovator Redis Labs ($2 billion) also lists corporate headquarters in Mountain View. On April 7, Redis and San Francisco-based Trax ($2.3 billion), a retail analytics leader, raised $950 million combined.

“When you unpack these astonishing figures,” Kaplowitz said, “you begin to understand that the investments fund new jobs and boost local economic activity.”

In San Mateo, Tipalti, has grown its accounts payable and global remittance automation solutions into an enterprise valued at $2 billion.

Dremio, a big data curating engine ($1.0 billion), and Innoviz ($1.4 billion), a LiDAR manufacturer, maintain headquarters in Santa Clara.

Last week, USIBA published research findings on the 21 Israeli-founded unicorns based in New York. Tel Aviv is the city with the most Israeli-founded unicorns in the world.

Soon after the New York report, Outbrain, a unicorn from the list, filed a confidential prospectus with the US Securities and Exchange Commission for plans to IPO. This development came a day after Israeli-founded ad software company DoubleVerify – headquartered in SoHo – closed its first day on the New York Stock Exchange up 33 percent, leading it to a market cap of $5.3 billion, the USIBA statement said.

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