Home to more than 800 fintech companies, Israel is today considered a powerhouse in the global fintech scene, having minted some of the world’s most notable startups including online broker eToro, paytech startup Rapyd, and insurtech provider Lemonade.
In 2021, fintech continued to be investors’ favored industry, accounting for 70% of all vertical capital volume, a new report by IVC, a local high-tech startup research institution, and Meitar, the largest law firm in Israel, says.
In 2022, the momentum is expected to continue as the Israel Securities Authority starts granting licenses for fintech companies to operate in Israel, a major regulatory development that’s set to help improve competition in the financial system.
To get a sense of some of Israel’s burgeoning fintech industry, we look today at the country’s most exciting and well-funded fintech startups. These startups have gained financial backing from prominent investors and recorded significant growth over the past years.
For this list, we’ve selected private fintech companies headquartered in Israel, excluding thus the likes of eToro, Rapyd, Melio, Tipalti, Papaya Global and Fireblocks which are Israeli-founded companies but which moved their headquarters to other locations. Many of these top startups are still maintaining offices and key functions in Israel, including research and development (R&D). We’ve also excluded those that were acquired as well as those that merged or went public in stock markets.
BioCatch – US$215 million
Founded in 2011, BioCatch is a cybersecurity startup specializing in behavioral biometrics. The company’s technology leverages machine learning to analyze an online user’s physical and cognitive digital behavior to protect individuals online. The system provides continuous protection, and is able to detect stolen or synthetic identities used at onboarding, recognize account takeovers and flag sophisticated social engineering scams, among other security challenges.
BioCatch claims to serve over 25 of the top 100 global banks and have more than 70 registered patents. The company has been looking to expand its footprint across Asia-Pacific (APAC) where it recorded a 335% annual recurring revenue growth, reported Biometricupdate.com earlier this month.
According to Dealroom, Crunchbase and Tracxn data, BioCatch has raised about US$215 million in funding, its latest fundraising being a US$168 million Series C closed in late 2020.
OurCrowd – US$192 million
Founded in 2013, OurCrowd is an online global venture investing platform that allows institutions and individual accredited investors to invest and engage in emerging technology companies before they go public.
The company vets and selects companies across all sectors and stages, and invests its own capital. It claims to boast of a network of over 160,000 registered members from 195 countries, which it allows to co-invest from US$10,000 each in the companies and funds of their choice.
As of 2021, OurCrowd had received over US$1.8 billion in commitments, deployed capital into more than 280 portfolio companies and 30 funds across five continents, recorded 50 exits including the stock listings such as Lemonade, and high-profile acquisitions like Microsoft’s purchase of security startup CyberX.
According to data from Crunchbase, Dealroom and Tracnx, OurCrowd has raised about US$192 million in funding. Its latest fundraising was US$25 million convertible equity investment from SoftBank’s Vision Fund 2 in October 2021.
Personetics – US$178 million
Founded in 2011, Personetics is a fintech software company specialized in data and artificial intelligence (AI). The company’s technology analyzes financial data in real-time to understand customer financial behavior, anticipate customer needs and deliver a hyper-personalized experience, allowing for banks to offer day-to-day insights, financial advice, and automated wellness programs to their customers.
Personetics claims its AI software helps financial institutions increase digital customer engagement by up to 35%, account and balance growth by 20% and adoption of personalized product recommendations and advice by 17%. It serves over 80 financial institutions including US Bank, the Royal Bank of Canada, Santander, Metro Bank and United Overseas Bank.
Personetics raised over US$160 million in 2021, bringing its total funding to about US$178 million, according to Crunchbase and Dealroom data.
One Zero – US$120 million
One Zero, formerly known the First Digital Bank, is a fully digital bank and the first new bank to be introduced in Israel in over 40 years.
The bank, which has been operating on a trial basis, offering banking services to employees and their families, is planning a soft launch or a limited launch for later this year. It will offer services including personal accounts, joint accounts, loans, deposits, credit cards, stocks, guarantees, standing orders, and foreign currencies, with mortgages expected to be added to the list of offerings later on. It will have no branches and will leverage AI-based technology to provide customized service experiences for customers.
One Zero, which received regulatory approval for a full banking license in January 2022, had over 60,000 people on its waiting list as of December 2021, according to reports by the Times of Israel. Last year, it closed a US$120 million Series A funding round, giving the company a US$320 million valuation.
Earnix – US$100 million
Founded in 2001, Earnix is the developer of an integrated customer analytics software designed to help financial companies offer personalized offerings to their customers.
The company’s software combines predictive modeling and optimization with real-time connectivity to core operational systems. This enables analytics-driven decisions to every customer interaction, helping financial institutions improve their products, pricing and marketing decisions, while ensuring alignment with changing market dynamics.
Earnix reached unicorn status in February 2021 after securing US$75 million at a pre-money valuation of US$1 billion. The company said it will use the proceeds to grow internationally, develop new products and support deals. The round brought Earnix’s total amount of capital raised to more than US$100 million.
ThetaRay – US$90 million
Founded in 2013, ThetaRay is a data analytics and fraud/crime prevention specialist. The company provides banks with a AI-powered transaction monitoring software-as-a-service (SaaS) solution that analyzes SWIFT traffic, risk indicators and client/payer/payee data to detect anomalies indicating money laundering activity across complex, cross-border transaction paths.
ThetaRay’s AI-driven anti money laundering (AML) solution can be easily integrated and deployed within days, and is used by some of the world’s largest international tier 1 banks as well as governmental agencies from different juridictions, the startup claims.
ThetaRay completed a US$31 million funding round in May 2021, bringing its total funding to more than US$90 million. The company said back then that it will be using the capital to market a cloud version of its products and expand its target audiences to any organization that deals in cross-border payments.
