Fintech has become a major source of revenue for many countries across the globe — Israel is one of the latest. The Fintech sector in Israel has had a record-breaking first half of the year when it comes to venture capital investments, as reported by the Start-Up Nation Central.
Israel is known for its high status in technology. This comes as a result of its great emphasis on higher education. To show how popular it truly has become, it is important to mention that Tel Aviv, a city on Israel’s Mediterranean coast, made the 2021 top 50 fintech City rankings, placing at number 5.
Looking into their record-breaking first half, the country experienced a 260% increase in investments over H1 2020 funding, with companies raising $2.3 billion. In addition, investments in fintech accounted for 19% of innovative technology funding in Israel in H1.
Fintech is considered to be a very mature sector across the globe, having been growing rampant ever since the beginning of 2020. That being said, many startups are wanting in on the success of the industry. In the country as a whole, there are 482 FinTech startups as of July 1, and 65 fintech unicorns as of May. The greatest reason for Israel having so many unicorns is the increased activity from US investors.
There are many sectors within fintech that countries make money off of. Israel in particular’s most prominent sectors has been: payments, insurtech, and anti-fraud. 70% of fintech funding was into these three sectors. Out of the three, payments continue to be the largest in 2021 making up for half of the 70% — no surprise here. With contactless payments becoming so crucial to society through the Covid-19 pandemic and many companies creating mobile apps such as wallets to help with this, it is a no-brainer that the payments sector created the greatest amount of funding in the first half of 2021.
Covid-19 wasn’t just the driving force behind the increased need for contactless payments, but was also the driving force for fintech as a whole; the pandemic lit a fire under companies in the sector. Many credit the investment growth in enterprise solutions and increasing demand for corporate innovation in Israel to the pandemic.
Having a record-breaking first half of 2021 is very telling about the future of Israeli fintech. With that much success in just 6 months, the possibilities are endless.
Martin, Noga. “Better than Fine: Israeli Fintech Breaking Records.” Israelhayom.com, www.israelhayom.com/2021/07/27/better-than-fine-israeli-fintech-breaking-records/.