Israel is gaining a reputation as the largest technology hub outside of Silicon Valley and is often referred to by locals as the “Startup Nation.”
Technology startups have spread throughout the region, particularly in Tel Aviv and Herzliya. However, this week, a businessman is launching one of the first micro-fund and early-stage product accelerators in Jerusalem, so new ideas can flourish in one of the world’s oldest cities.
The new fund, dubbed Jumpspeed Ventures, was founded by Ben Wiener, a New Yorker who relocated to Jerusalem 15 years ago. Wiener noticed that startups based in Tel Aviv were capturing most of the attention of investors and the press. But Wiener is convinced that Jerusalem’s burgeoning startup ecosystem will soon give Tel Aviv a run for its money.
So Wiener decided to launch a micro-fund to provide capital to early-stage tech companies in Jerusalem. He opted against setting up a traditional venture firm, like Jerusalem Venture Partners, as he believes that most young companies lack the requisite funding to gain any kind of market traction (and the attention of VCs).
Jumpspeed will invest between $50,000 and $150,000 in promising ventures. The goal is to help these companies grow, so they can attract follow-on financing within 12 months. The founders participate in bi-weekly brainstorm sessions and peer-to-peer workgroups, and they meet regularly with relevant industry executives.
Wiener said the fund has already invested in three startups, and he is most intrigued by the digital media space. He is planning to announce a shortlist of advisors, partners, and mentors in the coming weeks. At this stage, Wiener declined to disclose the total size of the fund.
“I’m hoping to capitalize upon — and help drive — the re-emergence of a vibrant tech culture in the Jerusalem area,” said Wiener, who started his first software company in the region in the late ’90s. Prior to Jumpspeed, Wiener worked in a variety of corporate and business development roles at startups and for over five years in private equity.
A number of local startups have achieved success in recent years, which is sending a strong message to the city’s young people. NDS was acquired by Cisco for over $4 billion, and Mobileye, which develops technology to help drivers avoid accidents, just sold a 25 percent stake to blue-chip investors for $400 million.
Wiener is also encouraged by a number of recent initiatives in the city and the abundance of computer engineers graduating from the Hebrew University of Jerusalem, the Jerusalem College of Technology, and the Jerusalem College of Engineering.
In addition, Mayor Nir Barkat has taken a pro-tech stance — he’s a former entrepreneur and high-tech professional who was just re-elected for another five-year term. Barkat has thrown his support behind a number of new organizations, like Made in Jerusalem, which offer working space for entrepreneurs and are fostering a strong startup community.
“There are formal meetups of tech entrepreneurs in the universities and pubs, sometimes a few different ones in the same week, a dynamic that simply did not exist a few years ago,” said Wiener.