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Gulf relations, generative AI take center stage at Israeli investor summit

OurCrowd’s Global Investor Summit saw 9,000 attendees gather to discuss the latest startup and technology trends.

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After a three-year break, venture investing platform OurCrowd‘s 2023 Global Investor Summit returned for its first in-person event since the pandemic to showcase some of the world’s most innovative startups.

More than 9,000 participants, including 1,700 investors and 950 entrepreneurs, from 81 countries gathered in Jerusalem on Feb. 15 to discuss the latest startup and technology trends.

Climate tech, generative AI and ongoing relations in the Middle East were among the topics highlighted by investors.

Upsides in the downturn

Like in many other countries, VC activity in Israel dropped in 2022, with €9.7 billion (about $10.4 billion) invested across 666 deals—compared with 801 rounds worth €11.7 billion in 2021, according to PitchBook data.

The general consensus among conference attendees is that a rebound is unlikely this year, but investors believe the current slowdown may actually benefit the country’s startup ecosystem.

“The downturn has impacted [Israeli VC] a lot. We’re not seeing those very high valuations as much and investments have gone down, but it’s not necessarily a bad thing,” said Lisya Bahar Manoah, a partner at Catalyst Investments. “We’ve come back down to earth now, where efficiency, profits and customers are more important than growth at all costs. Quality companies will still do well even in a crisis.”

‘Sand Curtain’ comes down

According to the organizers, this year’s summit saw the largest-ever delegation from the Persian Gulf region, signaling a warming relationship between Israel and its neighbors.

This is in part thanks to the Abraham Accords, a series of agreements between Israel, the UAE, Bahrain, Sudan and Morocco that were signed in 2020 with the aim of establishing diplomatic and economic relations between Israel and these nations. The accords are seen as a significant step toward greater stability, investment and collaboration in the Middle East and North Africa.

“The fact that we’re here in Jerusalem talking about how we can cooperate means that the Middle East, instead of being seen as a source of conflict, can become a source of blessing for everyone,” OurCrowd’s founder and CEO John Medved said. “We’re not just investing in each other, but we’re building together, creating companies on the cutting edge of technologies like AI. [Through the accords], this region can take its rightful place as a world leader.”

Full speed ahead for climate tech

Saving the planet was a major theme for the Global Investor Summit, with panels highlighting startups working on new climate technologies from clean hydrogen to reforestation. Putting words into action, conference MC Matthew Kalman announced that startup UBQ Materials would be using waste from the summit to make its plastic substitute.

VCs are predicting that climate tech is in for another solid year for dealmaking despite the current market conditions.

Generative AI basks in the hype

Since the launch of ChatGPT, generative AI has been on every investor’s mind. The OurCrowd conference showcased several startups working in the space, including D-ID, a Tel Aviv-based company generating digital humans.

“Every 15 years or so, we have one of those monumental moments for innovation in tech, and right now that’s [generative AI],” OurCrowd US chairman Alec Ellison said. “We can’t even imagine all the use cases for generative AI, and as a foundational technology, it has the potential to lead to a massive amount of innovation.”

Generative AI featured as one of OurCrowd’s top 10 trends revealed at the summit—OurCrowd’s CEO even welcomed the audience as a digital human. But investing the space is not for the faint of heart, said Gary Munitz, executive director at Australia-based Macquarie Capital.

“Generative AI has the potential to change the world, but you need to be in it for the long haul,” Munitz said. “If you understand the real-world use cases, then it’s worth investing in—but if you just think the tech is cool, then it’s not for you. It could be years until we see outcomes, and investors will need to be patient.”

Featured image courtesy of Tomer Foltyn

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    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
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