Special report: Techs in the city – Arab-Israeli innovation in London

By Stephen Oryszczuk

Mustafa is talking about his research on people not taking their medicine properly, but he’s losing his audience. A few minutes earlier, a panel of investors challenged him on a “lack of product,” following his pitch. InterMed, his healthcare start-up, has not yet started up, they’re trying to tell him, and he won’t get money just by analysing the market – he needs a product to deliver, even if it’s just a prototype. But he just keeps talking about what data he’s gathered, and where from. Minds drift, interest wanes. If this was Dragon’s Den, they’d all be declaring themselves out.

Such is capitalism, but the fact that he’s here at all speaks volumes.

This is Wayra, a start-up accelerator in London, which is hosting the UK’s second Arabtech event, for which Arab Israeli entrepreneurs such as Mustafa have been flown in by Britain’s Embassy in Tel Aviv. The idea is that they meet British companies, develop British networks and hopefully land some British money, in the form of investment. He is one of ten start-ups presenting.

Why Arab Israelis? Why not just Israelis? “Tech entrepreneurs from the Arab community in Israel have great potential but face unequal opportunities,” says Naomi Krieger Karmy, director of the UK Israel Tech Hub, an embassy project and brainchild of former ambassador Matthew Gould. “Their disconnection from Israeli society makes it harder for them to grow their ideas into great businesses and promote them internationally.”

It shouldn’t be so. Israel is a world leader in technology (hi-tech accounts for half its exports) and is known as the “Start-Up Nation” for its unique tech ecosystem, so if money really is blind, as they say, then there shouldn’t be a problem. Yet there is. “Tech-savvy Israeli-Arabs struggle to compete with Tel Aviv’s tech scene, due to geographic distance from the centre of the country, limited funding, lack of access to social networks and the disadvantage in Israel, of not serving in the army,” she says.

“Things like this are needed,” says Rami Younes, 32, co-founder of MindoLife, another of the ten start-ups. “The Arab community in Israel is less revealed to the venture capitalists.” He says one of his Jewish partners served in 8200, an elite IDF cyber unit, meaning he is well-connected to Israel’s tech industry. But that’s a closed world for Rami who, like most Arab Israelis, didn’t serve in the army.

Things are changing. In recent years, a promising tech cluster has emerged in the Arab community around Nazareth, with an ‘incubator’ for small firms. Here, groups like Tsofen, which Sami Saadi co-founded, are working to promote the integration of Arab communities into Israel’s high-tech industry, with training, mentoring, work placements and early-stage business advice. “When we started working in Nazareth in 2008, there were only 30 Arab engineers in Nazareth. Now there are 700,” he says.

What is Israel’s government doing to help? “Generally there are less funds for Arab communities,” says Michel Aboud, 42, here presenting Simple Backend, his third venture. “But lately there are some special programmes from the Chief Scientist’s office for minorities, including Arabs and Charedim, and another programme where the government offers 85 percent, you pay 15 percent, and they don’t take equity. It’s wonderful.”

Sami Saadi sees it from a community perspective, not an individual one, and is less convinced. “They recognise the importance of developing this industry in Arab areas, that it will have both a social and economic impact,” he says, adding that Economy Minister Naftali Bennett, a religious nationalist and former settler leader, recently gave NIS 10 million over three years. “But we need a revolution in thinking about investment in this field. Government investment in places like Sderot, Kiryat Gat and Haifa had a great effect. Now it should invest in the Arab communities, not a million shekels but a billion, to build high-tech parks for companies.” In five years time, he hopes that 10 percent of Israel’s high-tech workforce will be Arab.

Jewish communities outside Israel are helping, with Britain’s UJIA funding work on an accelerator in the Galil. “There are plenty of Arab-Israelis with the right qualifications to succeed in hi-tech but they are often at a disadvantage in the jobs market,” says UJIA chief executive Michael Wegier. “Tsofen helps these young people get a job or placement that not only establishes them in their field, but also promotes the integration that Israel really needs.”

The UK government is tapping in, too. Business Secretary Sajid Javid is here at Wayru, talking about “partnerships in which British companies gain a global competitive edge via Israeli innovation, and Israeli innovation goes global via the UK”. He too sees the problem – and the opportunity. “Start-ups rely on networks and connections to expand,” he says. “The situation in Israel can make it difficult for Arab start-ups to get those connections. We don’t want to see any of that potential go to waste.”

It shouldn’t. The smart City suits among the Wayra crowd certainly don’t look like they’re here for charity. Indeed they’re not. It’s a “win-win,” says Naomi. “For example, the global market for Arabic language digital content and services is growing at double-digit rates annually, so partnerships between talented Arab entrepreneurs from Israel and leading UK digital media and publishing companies could enable exciting new market opportunities for both sides.”

That’s music to the ears of Bader Mawasy from Katkuti, another of the start-ups. He provides “educational Arabic-content apps for Arabic-speaking markets,” which even lets parents check on progress and compare their kids’ performance to others – an interesting concept to Jewish mums everywhere, I’d imagine, and certainly to several in the audience, who sit back up. It just shows that some ideas are too good to ignore.

Giving Arab Israelis the hi-tech boost they need may just be one of them.