There is at least one person predicting a bright outlook for Israel Startup Nation in 2023. In an interview with Globes, Barclays Israel CEO Ilan Paz predicted an increase in the number of IPOs to be made by Israeli startups in 2023. This is in stark contrast to many doomsayers who are predicting an economic catastrophe for Israel should the government of Prime Minister Benjamin Netanyahu move forward with its controversial judicial reform plans.
The government’s judicial reform plan would greatly curtail the power of Israel’s Supreme Court to nullify legislation passed by the Knesset and also limit the authority of Israel’s attorney general. Israel’s opposition charges this would harm Israel’s democracy thereby eroding foreign confidence in the country and hurting its economy.
And many international financial titans like Goldman Sachs and JPMorgan agree. And so do some Israeli business leaders. For example, Wiz, an Israeli cloud security startup and a unicorn, just raised $300 million. But the company said it would not be depositing the funds in Israeli banks because of fears about the judicial reforms.
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But Ilan Paz is not as gloomy as others on what lies in store for Israel in 2023, at least not when it comes to IPOs.
“I think that there will be some sort of reawakening during the year. We won’t return to the levels of 2021 but there will certainly be a reawakening compared with 2022,” Ilan Paz told Globes. “What happened is that the market rose significantly in January, and this has given companies optimism that this year will look different from 2022. If you look at the investment institutions that are participating in the offerings, in 2022 they lost money, no matter what investment they made – equity, bonds, and convertible bonds.”
“As soon as you lose, your inclination to make new investments is small, and this is what we saw in 2022,” added Ilan Paz. “A new year began, which opened in a different way, and the investment institutions are sitting on money, have put 2022 behind them and want to invest.”
Ilan Paz also spoke about how 2023 saw a strong opening in the bond market including significant bond issues from the State of Israel.