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The Future of Israel-Europe Tech Collaborations

Updated: Mar 19

Despite the current volatility of Israel’s geo-political situation, the fruitful partnerships between the Israeli tech sector and its European funding partners are expected to continue and expand.
Tech collaboration

This is due to the unique characteristics of Israel’s economy, that are sought-after by European investors who are looking to expand the continent’s market share amid U.S. and China economic tensions. These include a large number of highly skilled technological employees, a strong commitment to research & development (R&D), and a culture of innovation driven in large part by necessity, both in AgriTech (agricultural technology) and cyber security.

For these reasons, the presence of Israeli tech companies in the European market has seen steady growth over the last decade, with 912 Israeli companies boasting a presence in European Union (EU) countries as of 2021. Israeli tech companies have identified the European market, and especially the EU, as a key partner for business growth.

This trend was helped by a series of government initiatives, both in Israel and across Europe, designed to foster greater collaboration between the two markets. The strength of this collaboration lies in what each side brings to the table: Israeli companies with their highly skilled workforce and dedication to innovation and risk taking, and Europe with its powerful, massive economies and desire to compete with America’s tech sector.

Israeli Startups Targeting European Markets

Europe has long been aware of its need to promote digital innovation, with the EU declaring a €95 billion research and innovation plan in 2021, focused on the development of sustainable technology (Horizon Europe). Access to this funding has enabled the growth of many Israeli AgriTech, healthtech and artificial intelligence (AI) startups, much in the same way that the EU’s Horizon 2020 plan did.

Agritech, along with cyber security, have long been considered as the main export of Israel’s technological sector. But other areas of technological development have also developed a significant stake in Europe’s markets. Startups like online insurance provider Lemonade, co-founded by Israeli (and co-founder of Fiverr) Shai Winninger, are slowly but surely developing a growing European presence.

Let’s review some of these startups’ stories, and analyze what they did to gain successful traction in Europe:

1. Waze: Community-Based Navigation

Waze is a traffic navigation app that provides real-time traffic updates and route suggestions, based on user-collected data. Offering the app to users for free, Waze generates revenue through advertising and collaborating with navigation device manufacturers. To help it reach a wider audience in Europe, Waze focused its efforts on localization, offering users a wide variety of local languages. In 2013, the company was acquired by Google for over $1 billion.

2. IronSource: The Platform for Mobile App Developers

IronSource offers mobile app developers a wide range of tools to monetize their user base. Putting an emphasis on profitable growth, the Tel Aviv startup has steadily developed into a market leader in the app monetization space. They’ve achieved this by, among other things, acquiring European competitors such as Tapjoy and Mediative, gradually consolidating their power in the continent’s mobile app development space.

3. Aidoc: AI-Powered Medical Test Analysis

Aidoc is a healthtech startup that uses AI to analyze radiology tests. Having benefited significantly from the effects of COVID-19, when hospitals were understaffed and needed technology to support doctors more than ever. They have since announced a first-of-its-kind collaboration with UZ Brussel, which became the first European hospital to use AI for cross-departmental care coordination.

What all three companies share is a drive for innovation and the ability to leverage technological expertise to a competitive advantage. Thanks to their strategic decision to develop a presence in Europe, all three startups gained opportunities to grow either by acquisitions, smooth entry to new markets or the ability to find key partners. The entrepreneur-friendly climate of Europe’s business world provides Israeli startups the perfect environment to reach their full potential.

You can find more Israeli success stories in Europe in a previous blog post published on our site.

Open Innovation and Cross-border Partnerships

As mentioned before, some of the credit to the success of Israel-Europe tech collaborations can be attributed to the supportive government policies in both regions.

In Israel, the Innovation Authority, a government agency tasked with fostering digital and industrial development, and the Israel-Europe R&D Directorate (ISERD) provide funding and support for joint research and development (R&D) projects involving Israeli and European companies.

In Europe, beyond the EU’s Horizon 2020 and Horizon Europe programs, individual countries have also invested heavily in collaborative R&D projects with Israeli companies: Germany invested €8 million in nanotech projects in 2018, and both France and Italy have recently co-funded R&D projects with Israeli companies.

Countries like Spain are seeking to adopt Israel’s model of government-encouraged, privately-financed innovation. Experienced Israeli industrialists, like Gil Gidron, president of the Spain-Israel Chamber of Commerce, are collaborating with their European counterparts to help them boost R&D funding. “You can’t copy this model, but there are many aspects of it that can be adapted to Spain,” says Mr. Gidron.

This model is based on open innovation: a business approach that calls for transparency and collaboration in order to advance human knowledge and technological development, as opposed to the secrecy and competitiveness of traditional industrial innovation. To foster this model, the involvement of both governments, NGOs, and the private sector are all required. Israel’s R&D expenditure in 2021 was reported at over 5.5% - more than twice the average amount in OECD countries.


As a result of their collaboration, both Israel and Europe have seen a rise in public-private partnerships that have advanced technological developments. These partnerships involve collaboration between government agencies, private companies, and research institutions to drive innovation and economic growth. By putting together their resources and expertise, these partnerships have led to the development of cutting-edge technologies and solutions that benefit both regions.

These cross-regional collaborations also take place on the joint-venture level, where two companies from two different countries work together on developing new technologies. Some examples include Bosch and Zebra Medical Vision, working on AI-powered medical imaging solutions; and Mobileye and Volkswagen, working on developing autonomous driving capabilities.

In addition, Israel-Europe tech collaboration manifests itself in the foundation of cross-regional innovation hubs and accelerators, which offer networking and funding opportunities for Israeli startups on European soil.

Trends Shaping the Future of Tech Collaborations

Many of today’s biggest industry trends are at the core of Israel-Europe tech collaborations in recent years. These are the current and emerging trends that are likely to shape the future of Israel-Europe tech partnerships in the foreseeable future:

1. AI

The AI revolution is in full-swing, and has been so for years in Israel. Collaborations with European investors, research institutions and private companies include use cases like medical imaging and autonomous driving. By combining research expertise, AI specialists from both regions can reach technological breakthroughs faster. However, such collaborations must take into consideration the EU’s dedication to ethical applications of AI technology.

2. Blockchain

With many Israeli startups developing blockchain-based solutions for cyber security and FinTech use cases, Europe’s more traditional-industry based economy looks to leverage blockchain for supply chain management. The combination of these two approaches can facilitate better, more secure services to both private and commercial customers, and help strengthen Europe’s position as a financial hub.

3. Sustainable Technologies

sustainable technologies

The EU’s commitment to sustainable technology was proven by the launch of the Horizon Europe program and its massive budget. Israel is an established world leader in water and AgriTech development. The combined efforts on this front are beneficial both to Israeli startups, who receive generous funding and access to a sustainably-conscious customer base, and EU policymakers, who get the tech developments they need to meet ambitious climate protection goals.

4. Cyber Security

In an increasingly volatile world, cyber security - a leading Israeli export - is more in demand than ever. However, recent scandals and investigations involving Israeli cyber security firms’ actions in Europe require both Israeli companies and their EU counterparts to assure regulation compliance and ethical technological development. The stricter regulation in Europe and heightened importance of privacy protection in EU law require a strong cyber protection echo-system, and for Israeli startups, this provides a fantastic opportunity for growth.

5. Digital Transformation

Many of the EU’s economies - and societies - are heavily reliant on traditional industries and manufacturing. Digitalization and technological advancements are still lacking in countries such as Germany, despite repeated efforts by European governments to combat this. The need for efficient digital transformation efforts and change agents fits the Israeli startup culture perfectly, but it also requires a willingness on Europe’s part to adopt new ways of working alongside technology.

In order for Europe and Israel to become global leaders in these five areas, and for their collaboration to be successful, some key elements must be taken into consideration:

Government Facilitation

Europe and Israel’s governments need not only fund collaboration efforts and R&D projects, but also encourage and facilitate collaboration. 2023’s political turmoil in Israel, as well as global public opinion following the events of Israel’s war against Hamas, may lead governments to shy away from collaborating with the current Israeli government.

Commitment to Open Innovation

Private and public collaborators must consistently strive for an open innovation approach, to prevent silo structures, secrecy and profit-driven competitive approaches to R&D projects that may hinder rapid technological breakthroughs.

Cultural Understanding

The differing nature of Israeli and EU business culture has proven to be beneficial and fruitful, but it could lead to tensions, frustrations and a breakdown of communications. Skilled, experienced intercultural managers are a vital component for every Israel-Europe tech collaboration project, and both sides must do their best to train and retain them.

Consequences and Opportunities of Recent Crises

Despite the strong history of inter-cultural partnership, there is no doubt that the ongoing war in Israel has negatively impacted Israel’s tech industry and Israel-Europe tech collaborations. The war disrupted the daily operations of many companies, temporarily removed hundreds of thousands of employees from the workforce, and startup funding dropped by 46% in the last quarter of 2023.

Remarkably, in the months since the war broke out, the Israeli tech industry has managed to stabilize. Most companies resumed operations, and most employees returned to their previous positions. Still, the ongoing crisis presents many uncertainties for both Israelis and their European counterparts, who must account for future challenges that might materialize - but also for the opportunities.

Looking to integrate advanced solutions into your existing operations?

Many European investors might consider diversifying their partnerships and broadening their list of collaboration regions, but they would do well to keep in mind that “ the wars Israel had we had a dip in the economy but immediately after we had a huge spike back of innovation”, according to Israel’s Minister of Economy and Industry, Nir Barkat.

The aftermath of a crisis such as the current war can also provide a catalyst for innovation and adaptation within Israel’s tech industry. As companies adapt to the ongoing situation, they’ll develop more resilient business models and strategies. In addition, soldiers in active duty who participated in combat will be provided with free university education after their service, boosting Israel’s ranks of skilled adults.


European collaborators of Israeli startups will need to take stock of their current collaboration processes and adapt them to a post-war context. New collaboration models should be examined, including more online, remote collaboration and moving project units from country to country as required.

Despite this, and despite concerns amid Moody's Investors Service downgrading the Israeli government’s foreign-currency and local-currency issuer ratings from A1 to A2 recently, the view sounded by investment managers sates that the country’s unique economy remains an important option for investment.

“In our view, (Moody’s downgrading) is not a material event,” argues Hamilton Lane co-CEO Juan Delgado-Moreira. “We know that we have made money in the Israeli market, we are making money in the Israeli market and we will continue to make money in the Israeli market. The capital that is invested with us wants what is in Israel - a large pool of talent that produces technology and innovation… it doesn’t exist in other places.”

Future Outlook

The future of Israel-Europe tech collaborations is one of promise and potential, despite the murkiness of the current geo-political situation. Both regions share a long history of successful collaboration, a shared set of values, and a strong compatibility that produces exceptional results. The work of years of government policies, commitment to innovation, the sharing of knowledge and the drive to advance human knowledge has laid strong foundations that cannot be easily uprooted.

As crises like the COVID-19 pandemic, the war in Ukraine and the war in Israel have proven, our world is increasingly interconnected, and global, cross-regional collaborations are needed in order to deal with global, cross-regional challenges. Israel’s thriving startup ecosystem and Europe’s diverse markets and strong resources create a perfect synergy for mutual growth and success.

In order to maintain this synergy, both sides of this partnership must combat the voices within their societies calling for a mercantilist, nation-first approach, and continue to advocate for a culture of international, open innovation and collaboration. As geo-political instability reshapes the world as we know it, it is more vital than ever that Israel and Europe’s markets and tech sectors align themselves with each other.

To ensure it’s able to preserve its status on the global stage, Europe must maintain this relationship and leverage it for technological excellence. And despite recent crises, Israel’s tech industry’s resilience, and the lessons learned from the war, will contribute to the continued evolution of Israel-Europe tech collaborations. These collaborations can ultimately shape the future of global technology and drive innovation on an international scale.

We are Spyre Group, an international innovation consulting agency driving breakthrough impact on our clients’ products, services, and operations by applying world-leading, cutting-edge techniques for the joint deployment of startup technology and innovative ventures.


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