Sixteen Israelis qualified for the Forbes Billionaires list in 2011. This year we only count 13. That number is buoyed by the passing of Israel’s richest man, Sammy Ofer, last June, minting two new billionaires: his sons Eyal and Idan.
Dropping off the list were Michael Federmann (hotels and defense), Micheal Strauss (food and beverage), Shlomo Eliahu (insurance and banking), and Nochi Danker (investments).
It would be easy to chalk this up to market volatility, if that were the case. But it isn’t. Among developed nations, the Tel Aviv Stock Exchange is among the most stable over the past decade, an astounding feat for a country routinely threatened with violence and annihilation. Growth off the exchange is also impressive: foreign investment is increasing and real estate values are soaring. In 2006, Stef Wertheimer’s ISCAR attracted Warren Buffett‘s first major overseas investment. In December 2011, Apple bought up flash storage tech-maker Anobit for $500 million.
In spite of all that, nine of 16 Israeli billionaire fortunes were down this year. Only four were up. Among those, two come from the same company. Stock in Gil Shwed and Marius Nacht‘s cyber-security firm Checkpoint has increased 15% YOY. In 2002, Shwed graced the cover of our Billionaires issue with a headline that now seems laughable: “You can still get rich (even in tech)”. I’m hard-pressed to find a better illustration of how a decade can change conventional wisdom.
The truth is Israel’s rapid and consistent growth isn’t necessarily produced by companies owned by the country’s mega-wealthy. It is coming from the country’s not-quite-mega-wealthy and would-be Mark Zuckerbergs. In June 2011, Merrill Lynch released its own “2011 World Wealth Report,” which documented 10,153 millionaires in Israel, an increase of more than 20% from 2009. That is, in part, a product of TASE-traded tech companies like Retalix, Commtouch, NICE Systems and Sapiens and mature companies like Amdocs, ClickSoftware Technologies and Allot Communications that trade exclusively in the US. Rapid-pitch events like DLD Tel Aviv are connecting investors with start-ups, enriching Israel’s tech ecosystem. In January, The Economist reported that Israel sees $170 in venture capital per person, significantly higher than $75 per person in the US. Increasingly, that money is coming from outside of Israel.
Nobody who fell off the list is involved in that rapidly developing sector. Gil Shwed won’t be the last rags-to-riches Israeli tech story. Because, as he of all people knows, you can still get rich (even in tech).