In a year marked by geopolitical and social turmoil, founders and venture capitalists had to adapt quickly to new realities.
2023 has been an atypical year for the global tech industry. Locally, Israel has experienced a storm of unprecedented challenges unlike any before, and strengthening business resilience became imperative. Founders and venture capitalists, their families, friends, and teams were all affected. Entrepreneurs had to navigate, redefine their leadership, take initiative, and move fast as events unfolded. Even in tough times, Israel has proven once again that it can produce and achieve great things. The Grove Ventures team was there to help – and once again we were happy to be chosen by founders as the best VC to work with in the country on Founder’s Choice. Here are some of the most memorable events of this year:
Since January, Israeli citizens have been protesting weekly against its government’s plan and actions to overhaul the country’s judicial system and erode the power of the country’s Supreme Court. Some individuals and organizations from the local tech and VC industry took a very active part in the protests and formed a body called ‘The High-Tech Protest’.
Grove Ventures’ Managing Partner Dov Moran took a central role in the demonstrations. He signed public letters to state officials, helped fund lawsuits, and appeared as a speaker on the main stage in protests across the country. To explain the potential damages to the public, Dov also wrote multiple columns and gave numerous interviews to local and global media outlets. Alongside most leading VCs and tech companies, Grove Ventures allowed its employees to attend protests without taking a vacation day and saw its employees attend one of the biggest protests in the country’s history in front of the Israeli Parliament. Protestors opposing the judicial overhaul repeatedly warned against the fact that the internal rift could also worsen Israel’s position against external threats.
On October 7th, one such threat materialized and one of the country’s worst nightmares became a reality: More than 1,200 people were murdered and 240 were kidnapped by Hamas terrorists in a surprise attack that indiscriminately killed men, women, and children, and invaded 22 Israeli villages, towns, and military outposts. This horrific attack led to a war between the country and Hamas. Two of our General Partners were drafted, while the rest of the team helped in purchasing and packing supplies for soldiers and families that lost their family members and homes in the attack, working closely with relief organizations. We also joined local farmers in picking produce as a lack of working hands emerged as foreign workers left the country. In difficult times, we stand united and continue to pray for peace in the region. Our General Partner Dov Moran wrote a column about the importance of bringing the hostages home as quickly as possible in a prisoner swap. Our HR team held a session with our portfolio on how to adjust to the new reality and keep operational when some team members were traumatized, drafted, or displaced from their homes. Our General Partners worked daily with our founders to make sure they acted fast, mitigate uncertainties, and safeguard their businesses against unforeseen events. Our portfolio company ActiveFence joined online efforts to clean online platforms of hate speech, disinformation, and propaganda. The local tech ecosystem demonstrated strength of character, courage, and ingenuity. Even in tough times, it proved once again that Israeli tech delivers and continues to thrive, no matter what.
Back at the end of last year, Grove Ventures’ General Partner Renana Ashkenazi mentioned in an interview with CTech that “the dynamics of the market are changing, but they are simply going back to what was considered normal in the previous decade”. This year the turbulent market trends continued, and Ashkenazi stated in an additional interview that it was high time for founders “to focus on customers, efficiency and durability.” In 2023 we worked daily with our founders on responsibly maintaining cash runways. We did so by enforcing stricter reporting mechanisms with our finance team as well as encompassing and assisting our founders with budgeting, business decisions, and preparations for their next financing rounds.
2023 was a remarkable year for climate tech startups. Over the past three years alone, almost $100 billion has been invested across sectors such as renewables, energy storage, mobility, and agriculture, among others worldwide.
At Grove Ventures, climate tech has long been a key area of focus in our investment strategy. Thus far, we have invested in four companies in the sector, and we continuously examine new opportunities.
To stay ahead in a competitive investment landscape, this year our General Partner Lior Handelsman appeared in a great number of leading climate-focused events for upcoming entrepreneurs; the fund tracked the performance of its portfolio companies and published its first ESG Annual Report; we joined the TTI network of climate investors; judged at Units 81 and 8200’s Alumni Association climate hackathon to foster the next generation of climate tech innovators in Israel, and published advice for climate tech entrepreneurs. Our portfolio company Wiliot won Fast Company’s Next Big Things in Tech award for 2023 for excellence in innovation for addressing supply chain and environmental challenges and NoTraffic took CES’ 2023 innovation award for their mobility IoT platform.
This event highlighted the need for entrepreneurs to plan and take preventative measures to protect their businesses and the importance of spreading capital across multiple banking institutions. As the event unfolded, Grove Ventures published resources for companies and founders banking with SVB to help founders protect their capital and deal with the situation in real-time. Our General Partners, Finance and Value Creation teams worked closely with portfolio companies affected to make sure they acted in time and protected their assets as much as possible.
At Grove Ventures, we have been investing in AI since inception. We believe that this disruptive technology will change the way we work, study, play, access and analyze information. That’s why we invested early in 8 companies that change AI’s infrastructure or use AI across different verticals such as digital health and biotech, online trust and safety, mobility and traffic management, banking, and more.
In the past year, General Partner Lotan Levkowitz explained our AI thesis and his investments in ActiveFence and Navina in an interview with StartupsAI. Lotan was also interviewed together with Navina’s CEO Ronen Lavi (in Hebrew) on their joint ideation process journey and how Navina’s AI-powered technology came to be. Our General Partners Lior Handelsman and Renana Ashkenazi appeared on TechCrunch and explained how AI is used for improving drug discovery, why “Israel may be an AI-enabled biotech hotbed”, and the going-ons at our portfolio companies Nucleai and Protai.
As the shift was felt across the industry, Grove Ventures’ Principal Guy Zinman, who holds a PhD in Computer Science from Carnegie Mellon University, hosted a session with our portfolio companies on how to best implement AI tools in their operations and led AI efforts on selected projects with our portfolio and at some of the fund’s data-driven projects. We also attended OpenAI’s Founder Sam Altman’s visit to Israel.
Marked by more turbulence than anyone could’ve imagined, 2023 showed the world the strength and resilience of the Israeli tech ecosystem.
We’re looking forward to 2024 and pray for peace and new opportunities!
