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Almost every weekend for more than 30 weeks, tens of thousands of Israelis have taken to the streets of Tel Aviv to protest against government plans to weaken the judiciary and chip away at the independence of the Supreme Court.
Among those protesters marching up Kaplan Street in central Tel Aviv on Saturday was Chen Amit, co-founder and CEO of a fintech startup called Tipalti that was most recently valued at $8.3 billion.
“We cry for democracy and we fight for democracy,” Amit tells CNN. He and his family come out to protest every week.
Amit co-founded the firm with Oren Zeev in Israel in 2010. The global accounting and payments company is based in Israel, but headquartered in Foster City, California.
Its uber-modern offices in Tel Aviv aren’t especially notable — except that they overlook the site of last month’s car-ramming and stabbing spree by a Palestinian militant that injured eight.
But it’s his own government – not the Israeli Palestinian conflict – that worries Amit most. The judicial overhaul and the uncertainty, disruption and risks that come with it, are forcing him to shift Tipalti’s money and talent overseas, he says.
The company keeps all its funds outside Israel, apart from three months’ payroll as required by its bank, he says. Due to the risk on business continuity prompted by the overhaul, the company obtained an L1 visa that allows a US employer to transfer staff from its foreign office to its American one, he adds.
Amit expects 15% of his Israeli staff to move abroad within the next 18 months.
He’s not alone. A recent poll from the non-profit “Start-up Nation Central” (SNC) found almost 70% of more than 500 startups surveyed are taking steps to shift money, workers and even their headquarters outside Israel as a result of the overhaul. Some are even laying off staff.
At the same time, money going into Israel’s 7,000 startups is plunging, says Ari Strasberg, SNC’s Vice President of Strategy. “Investments in Israel are declining significantly,” he says. Between last year and this year, there has been a 70% drop in investments, he says.
He said the trend was “worrisome,” because unlike in the US, where a decline in startup investment has started to reverse, the drop is continuing in Israel, adding that the last quarter alone saw an additional decline of 30%.
Private investment — mostly from venture capital firms — in Israeli startups in the first six months of 2023 stood at $3.9 billion, the lowest since 2018, according to SNC.