5 Most Lucrative Israeli Fintech Firms



This article was written by Kwon Sok Oh, a Financial Analyst at I Know First.



5 Most Lucrative Israeli Fintech Firms


  • Structure of the Israeli Fintech Startup Environment

  • Strengths of the Israeli Fintech Startup Environment

  • Top 5 Israeli Fintech Startups

Structure of the Israeli Fintech Startup Environment

Israel currently has over 7000 thousand startups, living up to its reputation as the “startup nation.” Israel is considered the most venture capital intense country, with the highest investment funds per capita in the world. Israel’s unique combination of innovative and entrepreneurial mentality, technology-oriented ecosystem, government support, and international investment has driven the proliferation of the startup environment. Over 350 multinational companies, including technology giants, such as Intel, Apple, Microsoft, Amazon, and Samsung, and global financial institutions, such as JP Morgan, Citibank, and Barclays, have established R&D Centers in Israel to take advantage of the advent of novel startups and innovative technologies that solve existing problems. Taking a look at specific figures, Israeli startups generated $4.5 billion of funding in 2016, and 20% of this figure is attributable to Fintech startups. Currently, Israel has around 500 Fintech startups with about $600 million of cumulative funding. Furthermore, transaction value within the Israeli Fintech industry was $8.9 billion in 2017, and the annual growth rate is expected to be around 16.1%, resulting in $16.2 billion by the end of 2021. The largest market segment is currently digital payment with $6.0 billion of transaction value in 2017.


The Israeli Fintech market can be categorized into three market segments: digital payment, business finance, and personal finance. Digital payment, as stated above, comprises the majority of total transaction value of the Israeli Fintech industry, and the annual growth rate is expected to be around 10.5%, resulting in $8.96 billion by the end of 2021. The digital payment segment includes mobile payment, P2P money transfers, and digital commerce. Business finance accounts for $2.5 billion transaction value, with expected annual growth of 21.9%, reaching $5.4 billion by the end of 2021. The business finance segment includes crowd investing, crowd funding, and crowd lending. Finally, personal finance accounts for $0.4 billion transaction value, with expected annual growth of 42.0%, reaching $1.8 billion by the end of 2021. The personal finance segment is composed of marketplace lending and robo-advisory.

Strengths of Israeli Fintech Startup Environment

Israeli culture and mentality is the most dominant factor in the proliferation of Fintech startups. Israeli mentality is characterized by entrepreneurial spirit and innovative thinking. Moreover, Israeli culture is geared towards ambition and agility due to the underlying immigrant society. To promote technological innovation and exchange novel insights, the Israeli community is enthusiastic towards various networking opportunities, including hubs, conferences, and symposiums. More specifically, the Israeli Bitcoin emBassy gathers entrepreneurs to promote the widespread usage of bitcoin, and Barclay’s Rise Tel Aviv and Fintech Aviv are cooperating to find innovative solutions regarding the digitization of banking. Finally, China’s Pando Group is supporting The Floor to connect the Israeli Fintech market with Asian investors.

(Source: Wikimedia Commons)

Furthermore, there is a proliferation of talent available for the Fintech industry. The Israeli army, especially advanced units such as Unit 8200, plays an integral role in cultivating talent. Israeli servicemen and servicewomen are exposed to cyber security, IT systems, big data analytics, computer vision, and NLP during their experience in intelligence units. Hence, people with academic knowledge and practical experience are in abundance.

The international orientation of the Israeli Fintech industry also provides a myriad of investment opportunities for multinational groups. The local Israeli financial market is limited in size and centralized in portion, with five banking groups controlling over 90% of the whole Israeli banking credit. Hence, a considerable portion of the funding for Fintech startup comes from venture capitals and multinational banks. Also, most Israeli Fintech startups do not consider doing local business due to the limited size of the Israeli finance sector, local regulations and compliance, and the market dominance of a small number of banks as mentioned above. To easy regulations and compliance, the Israeli State has implemented the Sandbox Initiative. Moreover, the State has been giving out subsidies to multiple multinational groups, including Citibank and Barclays, that established Fintech R&D centers in Israel.

(Source: Wikimedia Commons)

Top 5 Israeli Fintech Startups


(Source: Flickr)

Payoneer is a financial services firm founded in 2005 by Israeli investor Yuval Tal. Payoneer provides online international money transfer and digital payment services, which allows account holders to send funds to and receive funds from their bank accounts, Payoneer e-wallets, and prepaid MasterCard debit cards. Payoneer specializes in international B2B payments, providing cross-border transaction services through more than 150 local currencies. Its main clients include Airbnb, Amazon, Google, Fiverr, Getty Images, and Upwork, who use Payonner to send massive amounts of payouts globally. Other various eCommerce marketplaces use Payoneer too.

Yuval Tal founded Payoneer in 2005 with $2 million through seed funding, and 83North added $4 million funding in 2007. Other investors include Carmel Ventures, Wellington Management, and Susquehana Growth Equity. 2016 is marked as an important year in the firm’s history. In 2016, Payoneer acquired Armor Payments, which was an internet escrow company. Through this acquisition, Payoneer was able to facilitate B2B transactions between $500 and $1,000,000, the range for which credit cards and letters of credit were not appropriate. In 2016, Payoneer also partnered with Latin American eCommerce site Linio, Japanese eCommerce giant Rakuten, Korean B2B marketplace EC21, and Indian bank IndusInd Bank. Furthermore, the firm initiated automated tax form services for mass payout clients and managed to raise another $180 million through Technology Crossover Ventures, reaching a cumulative funding of $234 million. Finally, in 2017, Payoneer initiated its Integrated Payments API for Saas providers, allowing international B2B payments to be linked across cloud platforms. Payoneer also opened its London office in June 2017.

Payoneer currently has more than 1,000 employees globally across 14 offices. The firm’s services are provided in over 200 countries and has more than 4 million users world-wide.


(Source: Wikimedia Commons)

OurCrowd is a financial services firm founded in 2013 by Jonathan Medved. OurCrowd provides equity crowdfunding platform services, allowing accredited investors to provide venture capital funding for startups. OurCrowd differentiates itself from other crowdfunding platforms such as Kickstar and Indiegogo by using equity crowdfunding as its model instead of donation crowdfunding. Furthermore, OurCrowd is unique in that it only accepts accredited investors even though recent regulatory changes allow crowdfunding to all investors. Israeli portfolio companies must donate some of their equity after the closing of each funding round.

Jonathan Medved found OurCrowd in 2013, and GE Ventures partnered with OurCrowd later that year, allowing GE to invest in OurCrowd’s investments too. By the end of 2013, OurCrowd managed to raise $25 million for 30 portfolio companies. This figure rose to $100 million for 100 portfolio companies by 2016. 2016 marked itself as a year of expansion for OurCrowd as it launched various funds, including Our Innovation Fund that invests in Australian startups, Qure that invests in digital health startups, and OurCrowd Portfolio Index Fund. Moreover, OurCrowd managed to raise $10 from United Overseas Bank of Singapore, displaying its ambition to expand into the Asian market. The number of investors increased year after year, from 3,000 investors attending OurCrowd’s summit at Jerusalem in 2016, to 5,000 investors in its 2017 summit. In 2018, OurCrowd managed to have 10,000 investors attend its Jerusalem summit. Recently, OurCrowd decided to direct its Lab2/02 seed stage incubator into investing in 100 startups for a period of 10 years. Furthermore, OurCrowd started a partnership with Bangkok Bank Public Company Limited to reach out into the Thailand market.

OurCrowd currently has more than 25,000 investors globally from over 112 countries. OurCrowd has raised investments for startups in the US, India, Canada, UK, Hong Kong, Singapore, and Australia, and has offices in Tel Aviv, San Diego, New York City, Toronto, London, Sydney, Madrid, Hong Kong, and Singapore. To date, OurCrowd has raised $700 million for 160 portfolio companies.


Fundbox is a financial technology firm founded in 2013 by Yuval Ariav, Eyal Shinar, and Tomer Michaeli. Fundbox provides a cash flow optimization tool that balances advances and outstanding invoices to enhance cash flow. Primary clients include small businesses and freelancers seeking to consistently maintain operations and to have a steady flow of cash for expenses such as equipment investments or payroll payout. Fundbox’s tools allow clients to smoothly run their businesses through optimizing cash flow and to discretely use advances from account receivables invoices. Fundbox uses data science engines and machine learning algorithms to calculate the line of credit and the risk of each invoice and deposits funds accordingly into the clients account. Clients are expected to repay the principal and respective fees within 12 weeks.

(Source: Wikimedia Commons)

Yuval Ariav, Eyal Shinar, and Tomer Michaeli found Fundbox in 2013, but it was under stealth operations until 2014, when it managed to raise $17.5 million through its series A investment round. Khosla Ventures, SV Angel, Vikram Pandit, and Tom Glocer invested in Fundbox. In 2015, Fundbox went through its series B investment round, raising $40 million from General Catalyst Partners, NyCa Investment Partners, Khosla Ventures, Shlomo Kramer, and Blumberg Capital.

Fundbox is currently based in San Francisco and has over 70,000 clients. Fundbox has raised over $100 million cumulatively, and its partners include Intuit Quickbooks, Freshbooks, Xero, Harvest, and Zoho.


Zooz is a financial services firm founded in 2010 by Eyal Kotler, Oren Levy, and Ronen Morecki. Zooz provides a digital payment platform that allows merchants to utilize various payment technologies and connect with multiple payment providers. The main goal of Zooz’s platform is to function as a routing platform for merchants and businesses, enabling them to connect with as many payment providers as possible. Zooz achieves this by giving clients the opportunity to interact with multiple financial institutions, by integrating various acquirers, e-wallets, alternative payment methods, and fraud management, and by thoroughly routing transactions through the whole payment process. Furthermore, Zooz analyzes payment data and provides merchants with relevant information, allowing them to customize customer experience both online and in retail stores. In conclusion, Zooz aims for a high level of global payment efficiency, cost reduction, rate decreases, and consumer data protection.

(Source: Flickr)

Zooz currently has raised $40 million cumulatively and has operations in Israel, Europe, and the United States. Zooz’s clients include a variety of high-profile businesses, such as Gett Taxi and Burberry Luxury Brand.

I Know First

I Know First is a Fintech company that provides state of the art AI-based self-learning algorithmic forecasting solutions for the capital markets to uncover the best investment opportunities. I Know First was selected as a Top 3 Fintech company in Europe in the European Fintech Awards 2017. I Know First has clients in over 50 countries and makes predictions over 40 markets across the world and considered one of the Top fintech companies in Israel.

The underlying technology of the algorithm is based on artificial intelligence, machine learning, and incorporates elements of artificial neural networks and genetic algorithms through which we analyze, model, and predict the stock market. The algorithm is adaptable, scalable, and features a Decision Support System (DSS) to optimize the information produced by the years of data inputted.

The algorithm generates daily market predictions for stocks, commodities, ETF’s, interest rates, currencies, and world indices for the short, medium and long term time horizons.

The I Know First algorithm is designed for large financial institutions, banks, and hedge funds in the capital market as well as private investors looking for an advanced algorithmic support system. The algorithm is currently tracking and predicting a growing universe of over 10,000 financial assets.


Also, it serves as a decision support system and develops systematic trading. Forecasts are produced daily with signals and predictability indicators. The system also outputs the predicted trend as a number along with a wave chart that predicts how the waves will overlap the trend. This helps the trader to decide which direction to trade, at what point to enter the trade, and when to exit.

I Know First is adaptable and scalable, allowing comprehensive, customized algorithmic solutions including integration of additional markets according to client needs. Its uniqueness also lies in its accessibility to all types of people apart from professional investors. The company is working with a loyal and growing client-base, including wealth management firms, hedge funds, fund management partnerships, family offices, financial advisors and professional investors from around the world.

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