The Rise of Blockchain and Crypto Companies in Israel: A 2019 Overview

Trend Analysis: Growth in Blockchain Firms

In 2019, Israel saw a boom in the number of blockchain and crypto enterprises, with a staggering 32% increase. A report released by the Israeli Bitcoin Association revealed that the number of firms jumped from 113 at the end of 2018 to 150 by year-end 2019. This growth is not just a blip; it reflects a growing interest in these technologies.

Survival of the Fittest: Company Lifespan

While the news of increasing numbers sounds fantastic, it comes with a sobering caveat. Out of the original 113 companies from 2018, only 63 are still in business today. This indicates that not all blockchain dreams become reality, as many organizations couldn’t weather the storm of 2019.

Small Teams, Big Aspirations

The landscape of these companies is largely populated by small teams, with most having fewer than ten employees. Shocking, right? This adds a layer of charm to the whole crypto startup culture — it’s all about camaraderie and caffeine-fueled brainstorming sessions. The report doesn’t shed light on precise employee figures, but it does indicate a notable reduction in staff sizes compared to earlier years.

Startup Culture: Birth of New Companies

The majority of companies entering this sector are fresh faces. The report states that 60% of currently active firms were established within the last two years. Specifically, about 30% were founded in 2017 and another 30% in 2018. It appears the local entrepreneurial spirit is unwavering in its quest for innovation.

Funding the Dream: Financing Sources

When it comes to securing finance, results show that 44% of these companies were self-funded, while 42% acquired funds from investors. A mere 7% relied on independent income streams to support their operations. This mix indicates a healthy confidence in the sustainability of the blockchain dream — plus, who wouldn’t want to invest in the future of finance?

Israel’s Global Standing: A Blockchain-Friendly Hub

In the global arena, Israel is recognized as a blockchain-friendly hub, boasting a respectable 49th position in the World Bank’s ease of doing business index. However, it struggles in areas like taxation and contract enforcement, being ranked 90th in both categories. It seems the country has a few kinks to iron out, even as it innovates at a lightning speed.

A Bright Future: Regulatory Developments

With the aim of encouraging a competitive market, the Capital Market, Insurance and Saving Authority in Israel’s Ministry of Finance is looking to streamline the licensing process for blockchain and fintech companies. This could mean a snowball effect of new players entering the field, fostering more innovation and perhaps some friendly competition along the way.