Navigating challenges, expanding opportunities: Insights and trends from Israel's thriving consumer-facing industry. A comprehensive review of the B2C ecosystem's performance and future prospects.
Despite a turbulent year, Israeli consumer-first startups showcased strong resilience, both in growth and profitability.
US GDP growth returned to a positive outlook in 2022: 3.2% in Q3 and 2.9%
in Q4.
In Q4 ‘22, the number of people daily using Facebook, Instagram and WhatsApp was at its highest ever.
Ron Tamir
Founding Partner, Kaedan Capital
Alan Feld
Co-Founder and Managing Partner, Vintage Investment Partners
of companies surveyed reported positive growth YoY, despite the turbulence of 2022 and a high base of 2021.
of surveyed companies reported growth of over 20% YoY.
of companies that reported YoY revenue growth, also reported higher profits vs. 2021.
of companies reported higher profits by more than 20% YoY vs. 2021
Chemi Peres
Managing Partner and Co-Founder, Pitango
Year 2021 set a record breaking in investments in Israeli tech.
However, throughout 2022 we saw a decline by 43% in funding and 15% in number of deals.
When looking at funding trends by half, and considering the overall drop in 2022
We're actually at an even lower run rate, as historically H2 has been a stronger half.
The sharpest decline has been in investments in companies in growth stage, while early stage investments are less impacted.
Year 2021 set a record breaking in investments in Israeli tech.
However, throughout 2022 we saw a decline by 43% in funding and 15% in number of deals.
When looking at funding trends by half, and considering the overall drop in 2022
We're actually at an even lower run rate, as historically H2 has been a stronger half.
The sharpest decline has been in investments in companies in growth stage, while early stage investments are less impacted.
Danny Cohen
General Partner, Viola Ventures
2022 was a challenging year:
US inflation was at its highest level in 40 years, reaching 9.1% in June 2022. However, it improved later in the year, ending at 6.5% in December 2022. (source: US BEA)
Consumer confidence declined significantly during 2022 amid rising prices and concerns of a looming recession.
Consumer savings were at their lowest level in decades. In December 2022, the personal saving rate (i.e. the ratio of personal savings to disposable personal income) in the US amounted to 3.4%, down from 7.5% in December 2021. (source: US BEA)
Fashion
Jewelry
Beauty
Home
Other
The majority of companies are bootstrapped or have raised less than $5M to date. Funding isn’t as common in e-commerce as in other tech industries in Israel. As a result, most of these companies are profitable and healthy businesses - an advantage in 2022.
Source: Statista
Felix Leshno
Founder & CEO, Underoutfit
Eytan Levit
Co-Founder, Mixtiles
The rise of the bootstrapped health businesses
The ongoing question around consumers in health
The multi-serve model is becoming mainstream
Consumer packaged health goods: Formulated foods designed to meet people or pets' nutritional needs.
Wellbeing: Holistic solutions to improve people's quality of life and prevent disease.
Health tech: Supportive technologies throughout the patient's journey or for particular health conditions.
We saw decline in mega-rounds (-60%), M&A activity (-50%), and IPOs and SPACs (18 vs. 99 in 2021).
On the positive side, we saw 107 startups reaching unicorn status (second highest year after 2021) and a 29% increase in median angel deal size.
High prioritization of health and wellness attributes today, Millenials vs overall, % of respondents
Future high prioritization of health and wellness in the near term, Millenials vs overall, % of respondents
Dror Ceder
Founder and CGO, Lumen
Digital health solutions have been gaining momentum in recent years, and the pandemic has accelerated their adoption. These solutions offer numerous benefits, including increased access to healthcare services, improved patient outcomes and reduced healthcare costs.
Access to health data is already becoming a critical component of personalized care and this trend is likely to continue. Personalized care is an advanced approach that tailors treatment and self-care to the individual needs of each patient, based on their unique medical history, genetics, lifestyle and other factors.
AI has already shown promise in a variety of healthcare applications, such as medical image analysis, clinical decision support and predictive analytics.
XR technologies, such as AR and VR, are also becoming increasingly prevalent in healthcare, particularly in areas such as medical education, surgical planning and pain management.
Categorized by the following revenue streams
Money raised to date
Number of employees
Annual revenue
Revenue growth in 2022
Education (startups such as Simply, Masterschool and TinyTap)
Productivity (startups such as AI21, CallApp and Karma)