Tel Aviv-based venture capital firm TLV Partners joined this week Nervousness In a warning from top officials and finance firms that a planned judicial overhaul by the new right-wing government threatens democracy and is set to harm the thriving local tech industry.
“If Israel’s democracy is harmed, high-tech industry will dry up or flee abroad. The best minds will leave, Israeli entrepreneurs will set up companies outside the country’s borders, the country’s credit rating will be affected (S&P) [Standard & Poor’s] has already announced that the legal reform could lower Israel’s credit rating), and so on,” the VC’s four partners – Rona Segev, Shahar Tzafar, Adi Yarel Toledano and Eitan Beck – wrote in a letter to the public Warned.
He warned, “An entire industry that carries the country on its shoulders will be forced to find another place to flourish.” “The loss is enormous and it will affect everyone – left, right, religious, secular, Arab and Jewish”
TLV Partners was founded in 2016 by entrepreneurs and venture capitalists Segev and Beck, previously with Israeli VC firm Pitango. They are joined by Tzafrir, previously with Magma Venture Partners, as managing partner, and Yerrell-Toledano, previously also with Magma, as partner and chief financial officer. To date, VCs have raised close to $1 billion, which has been invested back in at least 45 Israeli companies focused on fintech, deep tech, healthcare, cyber security, e-commerce, and property tech. The startups in which TLV Partners has invested have raised over $4 billion and employ over 4,000 people.
Its portfolio companies include Israeli AI medical imaging company Adoc, insurtech firm Next Insurance, data tech startup DataGen and Quantum Machines, the developer of a standard universal language for quantum computers and a unique platform that helps run them.
VC executives said, “The vast majority of capital invested in our industry is its sunshine and water.” “But no flower can bloom on rotten soil.”
last year, the fund raised A record $27 billion grab in 2021, mainly from foreign investment, was almost halved by Israeli startups, falling to $15.5 billion. This was the same share of $18.64 billion, or 73%, of total capital raised in 2019 and 2020.
Earlier this week, Barak Ilam, CEO of Israel’s Nice Ltd., a cloud-based software provider, warning That judicial upheaval is set to have irreparable consequences for Israel as a center for doing business and attracting investment.
The concerns raised by senior business executives came to the fore last week as Justice Minister Yariv Levin Proposed A judicial reform that would severely limit the High Court’s ability to strike down laws and allow the Knesset to re-enact legislation that the court has struck down. It would also give Benjamin Netanyahu government control over judges’ appointments and allow ministers to appoint their own legal advisers.
Proponents say the changes are needed to rein in a judiciary that subverts the will of the people, while critics argue it will remove a necessary check on legislative and executive power, thereby eliminating the democratic elements of the system of governance. Will go
“The Israeli high-tech ecosystem was built on freedom of expression and support for innovative and creative thinking. It thrives in places where people have rights and freedoms – what is a high-tech industry after all if not a mosaic of all the people who work in it,” TLV Partners wrote in the letter. “These values are being trampled upon by the present government. The current steps taken to paralyze the justice system and recklessly disrupt the balance between the authorities do enormous damage to democracy.
Other critics also argue that the overhaul would remove all controls on government power and jeopardize the rights of minorities and vulnerable elements within society.
“An unbalanced system is a dangerous system for everyone collectively and individually. It is dangerous for majorities and minorities. It is dangerous for both the right and the left. And it is our duty to prevent this from happening,” TLV Partners letter stated in. “We say these things with a heavy heart and great pain, and we hope that the destructive actions will be stopped before it is too late.”
