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BOOM! — Five Implications for the Israel Tech Ecosystem of the Mobileye Deal

Lots of people are opining on the strategic reasons why Intel is buying Mobileye. Business Insider wrote that “Having missed the boat on smartphones and with the PC industry in decline, Intel needs to find a new place to sell the chips that are the bread and butter of its business. On Monday, the company revealed its answer: cars — in particular, self-driving cars.”

I’ll leave the strategic reasoning for the deal to other pundits. I want to focus on the implications for those who, like me, spend their time helping to build the tech ecosystem in Israel.

First off, it kills the myth that Israelis can’t build big companies. At $15 billion, Mobileye dwarfs the biggest exit in NYC history(Tumbler IPO’d at $1.8B, now worth $1.2B).

Second, it kills the myth that Jerusalem is not a hotbed of innovation. As this great post by Ben Wiener (founder of Jerusalem based VC Jumpspeed) points out, VC’s that ignore the Jerusalem startups scene, do so at their own peril. This is now the third time (post #1, post #2) I’m writing a post where I declare “it’s happening in Jerusalem”!

Third, as Michael Eisenberg from Aleph writes in this post on Mobileye “…there is a burgeoning startup scene in Israel that is targeting the Automotive sector….. Today, Mobileye told them, you CAN win in this big market, heretofore owned by German, Japanese and US automakers and the Gulf Arab States, that supply much of the world’s oil.”. Many others, including me, having been making this point for awhile now.

Fourth, it turns the world’s focus to Israel, in a highly positive way, for at least a period of time. I’ve been on BloombergTV talking about Facebook more than fifty times. But yesterday was the first time BloombergTV asked me on to talk about Israel tech (click here to see me and Shuly Galili with UpwestLabs yapping about Israel tech, our segment starts at around minute 27). It seems to many Israeli’s that the world is already focused on Israel, but I think the world’s focus on Israel has just begun.

Yapping on BloombergTV for the first time about Israel Tech

But most importantly for the Israel tech sector, tech ecosystems, when they are humming, are virtuous circles. Exits beget capital that comes back to the ecosystem (see this story on “Who Rakes in Billions From Intel’s $15b Mobileye Buy”) and fund more start ups. Exits create educated tech execs who have learned how to successfully grow tech companies. Exits create dreamers who believe they can build the next Mobileye. Exits incentivize governments to bring more resources, better regulations, and more a hospitable environment for the tech sector. Exits beget people outside the ecosystem (i.e. foreigners) to focus more on the seemingly thriving ecosystem. And the bigger the exit, and $15 billion is MASSIVE, the greater the impact, the greater the increase in velocity in the tech ecosystem virtuous circle.

Israel’s tech sector was already booming, the Mobileye deal just adds more fuel to Start Up Nation’s roaring bonfire.

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