In September 2023, Jefferies hosted its seventh annual Tech Trek, Israel’s largest institutional investor conference. The three-day event connects leading global investors with the Israeli tech ecosystem through a series of panels, presentations, and meetings.
At the conference, Jefferies spoke with Shay Grinfeld, Managing Partner at Greenfield Partners, an Israel-based investment firm focused on early growth stage technology businesses. Grinfeld shared insights on the dynamic Israeli tech market, the risk-reward balance for growth companies, successful investor-entrepreneur partnerships, and more.
Note: Grinfeld’s comments on Israel were made before the events of Oct. 7. The ongoing conflict may influence the region’s tech ecosystem and investment landscape.
Israel’s Tech Market Evolution
Grinfeld, a seasoned investor in Israeli startups, spoke to the rapid growth of the country’s tech ecosystem. A burgeoning tech hub in the early 2000s, Israel has now emerged as one of the world’s most mature and productive markets. Today, the country is home to more than 90 “unicorns”, privately held businesses valued at over $1 billion.
“Looking back a decade or more, the typical Israeli company would develop a great technology and, upon reaching product-market fit with their initial customers, receive acquisition offers from the US or Europe in the $200 to $300 million range,” Grinfeld recounted. “Now, we regularly see Israeli companies reach $100 million in annual revenue, with many NASDAQ IPOs. Global capital is pouring into the Israeli market.”
He attributed Israel’s tech market growth to two trends: the surge of growth financing and the rise of seasoned entrepreneurs in Israeli ventures. Second- and third-time founders, experienced at scaling businesses, are keen to identify clear paths to profitability and collaborate with the right investors.
“When you think of the global tech scene, San Francisco, New York, and Austin come to mind, but the next city you have to think of is Tel Aviv,” Grinfeld said. “If you want to find great technology, you come to Israel.”
Guiding Startups to Global Readiness
Grinfeld then detailed Greenfield Partners’ investment approach, discussing the balance of risk and reward in growth-stage businesses and investors’ role in guiding companies toward maturity and global market readiness.
“At Greenfield Partners, we help early-stage companies prepare for global markets. What are key metrics, KPIs, benchmarks, and how do we achieve them?” He explained. “We put ourselves in the shoes of entrepreneurs and young CEOs. Their journeys begin with a product, but as they navigate market challenges, new employees, and global growth, they need an adaptable playbook. The experience of long-time investors and advisors is so important.”
Discussing his areas of focus, Grinfeld highlighted IT infrastructure, a sector of enduring interest. He highlighted how a solid tech infrastructure – across data, cybersecurity, IT, and computing, forms the foundation of the new applications and capabilities modern businesses are adopting. Grinfeld also underscored Israel’s global leadership in building top-tier tech infrastructures.
The Power of Collaboration
Finally, Grinfeld spoke to the importance of collaboration and understanding in investment. Events like Tech Trek, he said, are essential for bridging the knowledge, cultural, and experience gaps between global investors and entrepreneurs.
“Creating interactions between founders, CEOs, GPs, LPs on one stage fosters intimacy and collaboration,” Grinfeld shared. “At the end of the day, investors need to understand different stories, people, and cultures to be successful internationally. That’s the magic created by events like Tech Trek.”
Grinfeld’s comments offer a valuable perspective on tech investing, achieving scale as a growth business, and the continued evolution of the global tech ecosystem. As venture capital funds increasingly focus on international markets and entrepreneurs, his insights offer a strong platform for successful investor-entrepreneur partnerships.