Mayor of London Boris Johnson arrived in Israel this week on a three-day tour of the country intended to strengthen ties between the UK capital and the Startup Nation. The Mayor, who 30 years ago came to Israel to work on a kibbutz, admitted that he “made a less than spectacular contribution to the Israeli economy, and in order to rectify that, I’ve now brought a very, very serious trade delegation to build on what I think you would agree is a most fantastic partnership between London and Israel.”
After ringing the opening bell of the Tel Aviv Stock Exchange, then cycling down Rothschild Boulevard – dubbed Silicon Boulevard – with Mayor of Tel Aviv Ron Huldai, Johnson made a stop at Google’s Campus in Tel Aviv, where he spoke to a packed house of entrepreneurs, investors, and tech leaders – and tried out a few toys.
As part of his mission, Johnson praised and encouraged the tech trade between London and Tel Aviv, and invited Israeli entrepreneurs to make London their home away from home. London has a lower murder rate than New York, he quipped, more Michelin star restaurants than Paris, and less rain than Rome. But jokes aside, the London Mayor was quite serious about London’s startup economy. Under his leadership, the city’s entrepreneurial ecosystem has grown from a couple hundred companies to tens of thousands of startups, ranging from those in fin-tech and cyber security to education publishing and e-commerce.
With a dedicated team of Tech Advisors from the likes of Google, Apple, and Yahoo, along with the UK Israel Tech Hub, an initiative led by the British Embassy in Tel Aviv, Johnson is eager to build bridges between the Tel Aviv and London ecosystems so that the startup nation can connect to the scale up nation.
“London is the natural tech partner for Israeli firms looking to expand,” the mayor said at a panel alongside CEO of Google Israel Meir Brand, veteran venture capitalist Saul Klein, and Business Advisor to the British Prime Minister Eileen Burbidge. “With access to a world class talent pool and a booming digital economy it is no surprise that Israeli tech companies are making London their home.”
The strength of the UK digital economy is sometimes overshadowed by the high valuations of US-based technology companies. However, the UK boasts the world’s leading e-commerce market, with a higher percentage of internet users than the US, and is home to Google’s largest market outside the US. Such advantages are leading Israeli startups to consider London over San Francisco and New York when expanding abroad.
Online trading company eToro is one such example. Founded in 2007 and run by Co-Founder and CEO Yoni Assia, eToro has developed a social trading platform on which users can view and replicate strategies of leading traders in the eToro community. Based in Canary Wharf, one of London’s financial districts, eToro is part of the the fintech accelerator Level 39. “You wouldn’t find that in Israel,” said Assia. “We’re sitting in a space with about 50 other fintech companies.” With already 4.5 million users in more than 170 countries and $70 million in funding, including investment from Chinese insurance giant Ping An and the venture capital arm of German investment bank Commerzbank, eToro is making the most of what London has to offer.
Startups also like that London’s geography and time-zone enables them to cover both Eastern and Western markets, as well as the talent pool from world class universities, including Oxford, Cambridge and Imperial, which makes London not only a trading hub, but also an engineering one. Johnson also touts the progressive regulatory environment, which he says encourages startups to set up shop and publicly list on the London Stock Exchange; and of course there is funding.
“London is now Sandhill Road for the rest of the world,” said Mr Klein, referring to the street in Silicon Valley that is home to some of the largest and most famed VC firms. “There is more early stage capital under management in London than in any city other than San Francisco.” Research by London & Partners found that since the beginning of this year, the total venture capital investment into London startups has exceeded $1.7 billion, eclipsing the $1.3 billion raised in the whole of 2014.
Yet Assia touched upon another, less quantifiable asset in London. “Our drive as Israelis to do everything, and sort of drive through walls and get injured while doing it, is very Israeli in nature,” he said. “But thinking very structurally about a market and understanding the market, and how a brand thinks and looks like is something that almost doesn’t exist in Israel.”
From the perspective of the UK, Mr Klein explained that it is “imperative for the UK and Israel to cement this partnership because if technology is the energy for the 21st century, and Israel is one of the sources of 21st century energy…it is a fundamental, strategic imperative for the UK economy to be tapped into that.”
Despite these differences, which most agreed would be an opportunity for further growth, Mayor Johnson was keen to stress the commonalities of the two societies. “There is a reason why both Israel and London have this very vibrant, dynamic innovative culture, and that reason is very simple. They both have young populations who are argumentative, they won’t take what they’re given, they question everything, and at the risk of making an obvious point, they are both democracies,” the Mayor said. “You simply would not have a startup culture anything like the kind we see here in Israel in my view anywhere else in this area at the moment. You can have capitalism without democracy – we’ve seen that I’m afraid. But can you have innovation without democracy? I don’t think you can.”
Photos: David Iliff/ Wikipedia Commons; Kfir Sivan/ Tel Aviv Global, Mayor’s Office Tel Aviv; Nadav Attias/ Green Ride