Consumer startups, or B2C is not the thing that comes to mind when people talk about Israeli startups. Cybersecurity, Semiconductors and recently automotive, but apart from Waze, examples of consumer tech startups are hard to count on two hands for most people. In reality, something is brewing under the surface.
According to Wikipedia:
“A consumer software startup is a technology company focused on delivering products and/or services to individuals and/or households through programs (software) that operate on computers and/or mobile devices”
Great consumer tech requires, well, building products that appeal to consumers. This implies beautiful UI, great UX, growth strategies and a business model. Consumer startups can be capital intensive, hit-driven and face intense competition from both copycats and the large tech companies (every time I listen to a Google or Apple keynote with a new feature launch, I can’t help but thinking about the startups that are impacted by the move).
Some of the latest European Unicorns are consumer tech companies in entertainment and commerce: Spotify, Supercell, Farfetch, Auto1, Revolut, Deliveroo, Transferwise… so we know it can be done outside of the the valley. That said, Erik Feng at Kleiner Perkins asks are consumer startups dead? there’s been a sharp decline in the creation of consumer startups since the ‘golden era’ of 2009-2012.
As Erik points out, for consumer startups to succeed, they need network effects, preferred distribution channels, and talent resources. In Israel, some of the success stories in the graphic below coupled with years of Israeli product managers getting trained at Google, Facebook, Amazon, etc, have created a pool of talent with a lot of potential for consumer tech. In addition, user acquisition and monetisation remain a core capability of thousands of folks who spent time in the less glamorous side of tech: gambling, adtech, performance marketing, helping these B2C startups get started with growth hacking and user acquisition.
According to startup nation central, there are 1912 B2c startups in Israel. This doesn’t include all the B2B2C startups who total about 700. I wanted to shine a spotlight on some of the noteworthy consumer startups headquartered in Israel, across stages and would love to meet the new crop of entrepreneurs considering starting B2C startups in Israel.
- Waze – crowdsourced mobile traffic data – $1.4 billion acquisition by Google
- Wix – website builder – (NASDAQ:WIX) $4.9 billion market cap
- Viber – mobile messaging/online phone – $900 acquisition by Rakuten
- ICQ – online messaging – $450 million acquisition by AOL
- Plarium – game developer – $1 billion acquisition by the Aristocrat group
- 888 holdings – online gambling – (LON:888) – public, market cap $650 million
- Playtika – social gambling – acquired by Chinese conglomerate Giant for $4.4 billion
- The Gifts Project – collaborative gift buying – acquired by eBay (undisclosed)
Growth stage consumer startups in Israel:
- Minute Media (Disclosure: we are investors via Remagine Ventures)
- MyHeritage – family trees and genetic testing kits
- OrCam – computer vision powered visual and audio aids – received over $1 billion valuation
- Gett – on demand taxi
- Lemonade – crowdsourced insurance
- eToro – stock and crypto trading platform
- Tabtale – the largest app publisher for children
- Fiverr – freelancer marketplace for services
Select Mid size B2C startups in Israel:
- Medisafe -personalised medicine reminders
- Lightricks – one of the top photo editing apps on mobile
- Joytunes – ed tech for music
- AnyDo – a smart mobile to do list
- Zeek – marketplace for giftcards
- HomeTalk – one of the largest DIY content hubs
Select Early stage B2C startups in Israel:
- Metaflow (Lumen) – connected device to measure metabolism in the breath
- Roomer – P2P marketplace for hotel rooms
- Jolt – knowledge marketplace
- K Health – personalised health assistant
- Homeis – local social network for expats
- Stream Elements – tools for game streamers
Having worked as a product manager, senior product manager, principal product manager etc at large search and commerce consumer companies (Shopping.com, Ask.com, AOL, Google, Antidote), I am very passionate about finding that product-market fit and solving a real problem for consumers. I’m also excited about the new crop of direct to consumer brands (or DTC/ D2C) who ship products direct to consumers as mentioned on VC Cafe. We at Remagine Ventures are very excited about the potential of new crop of consumer startups growing up in Israel. If you’re getting started and think we can help, don’t hesitate to get in touch!