National Report: 88 Israeli-Founded Unicorns Now Have U.S. Headquarters

The 88 companies have combined to create 61,858 direct jobs worldwide

MIAMI, April 26, 2023 /PRNewswire/ -- The United States is now home to 88 privately held, Israeli-founded companies that have reached or surpassed a $1 billion valuation, according to the United States – Israel Business Alliance. Each of these unicorns has at least one Israeli founder and its global or regional headquarters in the United States. The total number of Israeli-founded unicorns marks a 10% jump from last May.  

"The rising number of Israeli-founded unicorns in the United States is a testament to the strategic value that this market continues to offer Israeli entrepreneurs," USIBA president Aaron Kaplowitz said. "In recent years, there's been better product-market fit between Israeli technological solutions and American enterprise challenges."

The 88 Israeli-founded unicorns are the most ever to operate concurrently in the United States, up from 80 last May. The 11 states with Israeli-founded unicorn headquarters – also a record – are: California (35), New York (30), Massachusetts (10), Illinois (3), New Jersey (3), Florida (2), Georgia (1), Minnesota (1), Oregon (1), Texas (1), and Washington (1).

"States are competing harder than ever for Israeli know-how," Kaplowitz said. "Governors are well-aware that attracting Israeli tech companies can strengthen their respective state's reputation as a tech hub, boost the local innovation ecosystem, and position their communities for economic growth."

According to recent trends, Israeli founders are discovering more U.S. markets. In 2022, Israeli-founded unicorns headquartered in nine states. This year, Georgia and Minnesota joined the fray. Landa, a 3D printing innovator, has its U.S. headquarters in Atlanta. NextSilicon, a semiconductor processing company, relocated from Texas to Minneapolis.

Based on research and analysis, USIBA estimates that these 88 unicorns have combined to create 61,858 direct jobs worldwide. The average number of direct jobs created worldwide by each company is 703. Armis, a cybersecurity unicorn based in San Francisco, is the largest employer, with some 5,000 direct jobs created.

The estimated total valuation for all 88 unicorns amounts to $233.7 billion. That puts the average value for these Israeli-founded unicorns at $2.66 billion, down from a $2.79 billion average last May. Rapyd, located in California, remains at the top of the list with a $15 billion valuation, followed by Deel ($12 billion), Gusto ($10 billion), Wiz ($10 billion), and Navan ($9.2 billion).

The Israeli-founded unicorn cohort in the U.S. has not been immune to the global economic downturn. Investments have slowed dramatically and many of the companies have announced layoffs in recent months. Liquidity Group, headquartered in Manhattan, is the only Israeli-founded unicorn in the U.S. to cross the billion-dollar threshold so far in 2023. By way of comparison, 14 current Israeli-founded unicorns achieved their billion-dollar or greater valuation in 2020; 38 reached the milestone in 2021; and 21 did so in 2022.

Israeli-Founded Unicorns Based in the United States

Cybereason, a Boston-based cyber detection and response company, recently took in a $100 million investment from SoftBank, based on an estimated $400 million valuation – down from a $2.8 billion valuation it notched in 2021. In July, New Jersey-based cryptocurrency lender Celsius Network filed for Chapter 11 bankruptcy amid the industry's extreme volatility. According to USIBA research, in accordance with lower valuations that have spread across the global tech economy, roughly 55 percent of the U.S.-based Israeli-founded unicorns could raise at a $1 billion or greater valuation today.

"The days of unicorn valuations derived from overly generous revenue multiples are behind us," Kaplowitz said. "Amid recession concerns, investors are returning to pre-pandemic standards, considering annual recurring revenue numbers more carefully, and investing in companies that have proven they can execute."

According to Kaplowitz, while the global economic uncertainty does shed light on the dearth of newly minted Israeli-founded unicorns in 2023, it also helps explain why there are so many total unicorns at one time.

"Late-stage companies are no longer rushing to claim stock tickers," Kaplowitz said. "They would rather optimize efficiencies and go public when the market environment is more favorable."

Indeed, from USIBA's inaugural national unicorn report, published last May, only two Israeli-founded unicorns with U.S. headquarters – Selina and Pagaya – have gone public.

Since last April, the U.S. has added 15 Israeli-founded unicorns. Each of these companies either reached the billion-dollar valuation milestone or had already achieved unicorn status abroad and established a U.S. headquarters.

The companies' valuations and direct jobs creation figures mentioned in this report are estimates based on data resources, publicly available information, and conversations with executives and industry analysts. The estimates do not necessarily reflect the most current values.

About the United States – Israel Business Alliance The mission of the United States – Israel Business Alliance is to strengthen the economic relationship between individual states and Israel. Learn more about the impact Israeli-founded companies are having on local communities at www.usisrael.co.

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SOURCE United States - Israel Business Alliance

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