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Unicorns

Israeli Unicorns Looking Abroad for New Hubs in Wake of Judicial Reform Controversy

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A number of Israeli unicorns – startups with a valuation of more than $1 billion – are looking outside of their own country for new places to have centers for innovation and so forth. Israel’s Kan 11 television news reported that Cyprus and Greece are in the running for such a new hub, with Spain and Italy possibly also interested. This is all due to the ongoing political drama in Israel over the judicial reforms being promoted by the government of Prime Minister Benjamin Netanyahu.

This is more bad news for Startup Nation Israel which has seen the Shekel slide in the past few weeks against foreign currencies and even some of its own firms like Pagaya are taking their money abroad out of fear that the reforms would weaken world confidence in Israel’s political stability.

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The unicorns in question were not named by Kan News. Kan did, however, say that they expect the country they go to will provide them with tax breaks and the construction of new buildings.

The proposed judicial reforms have caused weeks of massive protests all over Israel against them. This is because the

The opposition in Israel’s Knesset calls the reform plan a “threat” to Israel’s democracy. The government, in turn, maintains that its program is intended to “restore” democracy in Israel as Israel’s Supreme Court, it maintains, has appropriated too many powers for itself over the years and is not elected by the public as the Knesset is.

Also, many Israel firms are taking their money out of the country out of concerns that the reforms could harm Israel’s economy. Many experts have said that should the judicial reforms pass then the world would lose faith in Israel’s democratic stability and so investors would not be as likely to invest there.

Major American firms like JP Morgan and Goldman Sachs have also expressed concerns about the future of Israel’s economy should the proposed judicial reform plan go through. The warning from JP Morgan came in the form of an internal memo titled “Israel Strategy: Domestic volatility flares up” that was revealed by Israeli media. The memo stated that “the volatility across Israeli local assets has notably increased recently, as renewed geopolitical tensions were added to investor concerns over the government’s potential judicial reforms.”

Goldman Sachs, issued its own warning that the judicial reforms proposed by Benjamin Netanyahu’s government could harm Israel’s economy and cause the Shekel to drop in value.

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