The Scene
Israel has produced more tech unicorns per citizen than any country in the world, twice as many as the US. Ittai Ben-Zeev’s job is getting them to stay there.
The CEO of the Tel Aviv Stock Exchange is tasked with convincing the next Wiz, Monday.com, and Fiverr, which all went public in New York or sold to US rivals, to list at home instead. He’s also courting global investors whose money will help boost trading and valuations.
His biggest tailwind, he said, is the takeover of US markets by a handful of AI giants. Israeli startups worth a few billion dollars can’t get the attention of investors rhapsodizing about trillion-dollar IPOs from SpaceX, Anthropic, and OpenAI.
“New York is no longer an option,” said Ben-Zeev, the exchange’s CEO since 2016.
After the Oct. 7 attacks, 7% of its workforce was called up for military service and the bear case for its stock market was obvious. Since Oct. 8, 2023, the TA-125 has beaten the S&P 500 by 50 percentage points and the tech-heavy Nasdaq Composite by 23. The country is on track this year for a record 30 IPOs. Foreign holdings of Israeli shares more than doubled from September 2023 to the beginning of this year.
Ben-Zeev dismissed wartime nationalism as a reason for Israeli founders to list at home, or for Israeli investors to buy their shares. “Israelis will be patriotic about certain issues, but that’s not the way they view the exchange,” he said. But he said the Jewish diaspora has increased its investments. Bill Ackman and his Israeli-born wife, Neri Oxman, bought 4.9% of the Tel Aviv Stock Exchange in 2024 after a 45-minute meeting with management, Ackman said in an interview.
“Owning a stock exchange is the purest way to bet on a country,” he said, taking a minute to run the numbers: His $23 million investment is worth $230 million today. He said AI’s productivity-enhancing potential will overcome Israel’s economic weakness, its small population. “There will be a trillion-dollar company coming out of Israel, and that value will be shared among a tiny country.”
The war also gave TASE cover to move its Sunday-to-Thursday trading to Monday through Friday. It wasn’t an easy pitch in a country that takes Shabbat seriously, but a way “to signal the world that we are part of it” and gain entry into global indexes that have long snubbed it, Ben-Zeev said.
Anti-Israel sentiment and antisemitism are fueling campaigns at many US institutions to divest from Israel. Politicians will politick, he said, but “investors, at the end of the day, want to make a return.”
Q&A
Liz Hoffman: Israel has produced more tech unicorns per capita than any other country in the world, but they all want to go public in New York. How do you hold onto them?
Ittai Ben-Zeev: It used to be that a tech company with $100 million [in annual revenue] could IPO in New York. That’s no longer the case. The $100 million became $500 million. And because of the gigantic IPOs that are coming, for most Israeli tech companies, New York is no longer an option.
Six or seven years ago, if an Israeli company couldn’t do an IPO on Nasdaq or NYSE, they were looking at Singapore, Toronto, Australia. We managed to change the perception. And I believe that in 2027, maybe before the end of 2026, we’ll start seeing global investment banks leading global IPO offerings on TASE, and only for TASE.
I’m mindful, speaking to you the week of the anniversary of Oct. 7 — is patriotism part of the pitch?
No. Post-Oct. 7, I see a genuine change in the way that Jewish people in the diaspora, especially in the States, want to invest in Israel, not only to make a return but also to get a broader connection to Israel. But that’s not the case with the Israeli entrepreneurs. Israelis, I have to tell you, will be patriotic about certain issues, but that’s not the way they view the exchange.
Then what’s the pitch?
You are Israeli. You don’t understand the American mentality. The American market can be brutal. You miss your estimates by one cent, your share price goes down, and then what? Start in the Israeli market and, once you’re ready, you can always do a dual listing. Think about TASE as a stop on the way to New York.
You’ve also courted global companies to dual-list in Tel Aviv. Palo Alto Networks did that after buying [Israeli startup] CyberArk, but why would most companies bother?
We have data that shows you get more liquidity and more demand for your shares. You can argue that it’s not significant enough, but it’s a free option.
And not too many people are aware of it, but if you look at the amount of money Israelis have in cash deposits in Israeli banks and you compare it to GDP, we are No. 1 of any western society. That’s money that is just ready to be invested.
You’re in New York this week, selling the Israeli economy to investors. But the Middle East is a volatile place to invest right now, and there are big anti-Israel divestment campaigns at some US institutions.
In the old days, people would ask me: What will happen to Israel if something happens in Iran? I remember being in New York a couple of years ago, telling one of those American investors that if something happened in Iran, you should be more worried about your American portfolio than your Israeli portfolio. Israel is more well-positioned than it used to be, and I’m not sure that everybody fully understands it.
In terms of BDS [the push for boycotts, divestment, and economic sanctions against Israel], there are politicians all over the world. Investors, at the end of the day, want to make a return. And the Israeli market is a good marketplace to make a return. Also, I think Israel can do a better job of PR. This is part of what we tell companies: You need to know how to sell the pitch. It’s not only about facts; it’s also about storytelling. As a country, this is something we need to do better.
You shifted trading from Sunday to Thursday to Monday to Friday. Was that a hard sell?
We were in the middle of a war. Everybody understood that it’s important for us to signal the world that we are part of it. We needed to get aligned to global standards, and this is what we did this year.
What’s it like having Bill Ackman on your cap table?
For sure it has helped change the perception. Israeli tech guys, they look to New York. When they will read what you’re writing, they will give it much more credit than what the Israeli newspaper writes. So a very successful businessman like Bill talking about the Israeli economy, putting faith in the Tel Aviv Stock Exchange, helps my pitch.