Amnon Shashua Credit Mobileye
Even before the barbaric Hamas attack of October 7 and the war in Gaza, Israel Startup Nation had a lot of trouble in 2023. This was due to a worldwide financial crunch caused by the war in Ukraine. Even major Israeli companies like Mobileye suffered.
Here now is the Jewish Business News list of the six biggest company failures from Israel in 2023.
Silicon Valley Bank Collapse Had Repercussions In Israel
Silicon Valley Bank (SVB)collapsed in what was described as the largest failure of a US bank since Washington Mutual in 2008. In March, the Federal government was forced to take over SVB and this is having repercussions in Israel where hundreds of firms are said to have deposits with the bank.
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Silicon Valley Bank had a Representative Office in Israel with a team based in Tel Aviv.
Its dealings in Israel were so large that the Prime Minister of Israel Benjamin Netanyahu was forced to tell the public at the time that he was closely monitoring the collapse of Silicon Valley Bank, which has led to a major crisis in the high-tech world and to reassure them saying, “The Israeli economy is strong and stable, which finds expression in this crisis as well.”
Cybereason Lost 90% Of Its Valuation
In March, Cybereason, an Israeli cybersecurity startup that was valued at $3.5 billion and that has long been looking to hold an IPO, has apparently lost 90% of its value. A recent $100 million investment in the company gave it just a $300-400 million valuation, reported Axios based on the SEC forms filed recently.
Mobileye Plummets
In April, Israel’s Mobileye, an Israeli company that develops automated driving systems, saw its shares plummet after the company reported a 15% decline in sales forecasts. The company also predicted increased losses in 2023 as a result of growing competition from Tesla for electric vehicles in the Chinese market.
Vesttoo Looks To Bankruptcy
Vesttoo, an Israeli insurtech startup and a unicorn that was rocked by allegations of fraud, was forced to seek Chapter 11 bankruptcy protection. In July it was reported that Vesttoo investors allegedly provided fake letters of credit (LOCs) to insurers for reinsurance transactions on the Vesttoo platform are believed to total a sum of around $4 billion. Most of these letters reportedly came from what was described as a leading Chinese bank, which appears to have been unaware of the situation.
Israeli Startup Veev Expects Imminent Closure
Veev, an Israeli startup that develops modular prefabricated homes, is in danger of shuttering. The company informed its remaining employees that after a failure to raise new capital, it may be forced to shut down.
Veev has raised as much as $600 million in investments, yet it could not withstand the worldwide financial crunch that came as a result of the Russian invasion of Ukraine. One year ago the company was already forced to lay off about 30% of its workforce.
Good Bye WeWork
WeWork was not an Israeli firm, but it was founded by an Israeli named Adam Neumann.
WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey. The company quickly grew and became a unicorn, reaching a valuation of over $47 billion in 2019. However, WeWork’s IPO in 2019 was met with controversy due to concerns about its financials and corporate governance. The IPO was eventually withdrawn and WeWork was taken over by SoftBank, its largest investor.
The company once had a valuation of $47 billion. But in August, the NYSE suspended trading in WeWork’s warrants because, said the exchange, its price was “abnormally low.”
