Saturday Panel: Taboo Investing: Zionism in Tech

Business-Focused Summary

Operating Through Disruption

• Israeli tech companies reported maintaining delivery despite reserve-duty absences. CyberArk had about 1,100 employees in Israel, with an estimated 10–20% called up during the period discussed. Some reservists served 100–250 days.
• CyberArk described global teams in locations such as Singapore and Boston covering for absent Israeli colleagues. One employee, after serving for six months, returned to the office in uniform to thank colleagues for supporting him and his family. Another R&D leader arranged for a retired reservist to return and share shifts, allowing the leader to resume work.
• Oracle’s Israeli team also continued operating and delivered what CEO Safra Catz called the company’s best year ever. She said customers in Israel praised the team’s support and execution.
• These examples point to practical resilience tactics: cross-office coverage, flexible staffing, employee and family support, and temporary replacements for critical roles.

Company Positions, Identity, and Customer Relationships

The panel disagreed on whether companies should publicly take political positions:

• Yasmin Lukatz and Udi Mokady generally favored keeping corporate communications focused on business, while making exceptions for issues they consider fundamental to the company’s identity or basic human values.
• Simone Ledeen argued that companies and investors should take a stand, particularly in support of Israeli defense technology.
• Safra Catz described Oracle’s unusually explicit public support for Israel.

Oracle displayed a “we stand with Israel” message across its global websites, including localized versions, and linked to donations for Magen David Adom. Catz said Oracle also provided extra pay to employees affected by the conflict; some employees donated part of it to support children.

The panel stressed authenticity: founders should not conceal their Israeli identity, but should avoid turning every customer interaction into a political discussion.

Sales recommendation: Lead a cold call with the product or service, its value, the numbers, and the customer problem it solves. Mention Israeli identity or relevant service experience when it supports the case, but do not make it the opening pitch by default.

A CyberArk example illustrated the limits of public expression: an employee’s pro-Israel email signature raised a vendor-policy concern during a deal. The company routed the customer relationship through someone else and continued pursuing the order, while the executive privately praised the employee’s support.

Market Access and Business Examples

Lukatz described two contrasting startup outcomes:

• A startup negotiating with a Saudi company received a message ending the potential relationship because of its Israeli founder and ties to Israel.
• A Finnish buyer continued due diligence and proceeded with an acquisition after October 7, despite the disruption.

Ledeen cited the 2024 Paris defense expo as a warning for early-stage companies: Israeli firms were initially uninvited and then reinvited midweek, after some had already canceled plans. She said such decisions can cause real commercial damage.

Catz said Oracle’s business in most Gulf countries increased after its public statement of support for Israel, in some cases doubling. She did not identify the countries. She also said some companies that reject Israeli vendors may lose access to newer technology.

Mokady said Israeli cybersecurity companies can command international valuation premiums. He also described a U.S. venture fund seeking introductions to Israeli cybersecurity startups despite having no local presence.

Investment Strategy and Funding

Several speakers argued that periods of conflict and market uncertainty can create attractive entry points:

• Lukatz’s rationale was that Israeli technology remains competitive and venture funds need to deploy capital into strong companies rather than avoid a market wholesale.
• Ledeen said her fund is focused on Israeli defense tech and described strong interest from U.S. investors who visited Israel. She said some prospective Jewish-American investors initially viewed the opportunity as charitable, so the fund adjusted its fundraising pitch to emphasize potential commercial returns.
• Catz recommended investing when others are retreating, citing Oracle’s acquisition of Sun Microsystems during the global financial crisis. She said Oracle paid about $5 billion net of cash and recouped more than $5 billion within the first two years.

Ledeen argued Israeli startups can offer comparatively attractive valuations versus similar companies elsewhere. She was particularly bullish on defense technology, citing the combination of Israeli innovation and operational experience.

Fund structures and ecosystem support:

• Lukatz described the ICON Continuity Fund, created alongside the ICON nonprofit network. The fund donates all general-partner profits to the nonprofit, which she presented as a way to support nonprofit sustainability through a commercial vehicle.
• The moderator mentioned Iron Nation, a fund created to help Israeli startups access financing, and said investors would be hosted in Israel later in October.

The moderator cited a figure that 90% of investment in Israeli tech comes from non-Israeli sources, presenting it as context for the sector’s reliance on international capital.

Technology Strategy: AI and Cybersecurity

The panel acknowledged that Israel may have missed some opportunities in foundational large language models, but argued that significant openings remain in AI applications.

Potential areas mentioned included AI for healthcare and finance, as well as trust, security, and protection against malicious or unreliable AI outputs.

Mokady described cybersecurity as a strong Israeli category with an established international reputation and suggested that some of that reputation could extend to defense tech and adjacent AI applications.

Long-Term Talent and Organizational Priorities

Lukatz and Mokady identified education and workforce participation as major risks to Israel’s long-term technology advantage. They expressed concern that a growing share of the population does not receive core studies such as math and English, potentially shrinking the future pool of technology workers.

Mokady argued that the Israeli tech ecosystem already has a functioning startup flywheel: large companies produce experienced employees who go on to found startups. However, that flywheel depends on a strong pipeline beginning in education.

Catz emphasized the role of military technology units and their alumni networks in training talent and connecting people to startups.

CyberArk’s expansion to Beersheba was cited as an effort to recruit more employees from Israel’s periphery and broaden participation in the high-tech sector.

Speakers also urged greater coordination among pro-Israel and Jewish nonprofits, arguing that organizations often duplicate work. Suggested tactics included funding collaboration and using convening organizations to coordinate efforts.

Mokady added that business competition remains valuable: the objective is not charity, but better products, execution, and returns.

Key Metrics and Timelines

• CyberArk: 1,100 employees in Israel; approximately 10–20% called up for reserve duty; some served 100–250 days.
• CyberArk: Founded in 1999 and went public in 2014. Mokady said the company was approaching its 10-year public-company anniversary.
• Oracle: Catz described the company as having nearly $60 billion in revenue and its best year ever. She said business doubled in most Gulf countries after Oracle’s public support message.
• Oracle: Approximately 15 million shekels in donations had been reported early on; Catz did not provide a final total.
• Sun Microsystems acquisition: About $5 billion net of cash, with more than $5 billion recovered in the first two years, according to Catz.
• ICON nonprofit: 10 years old; its Continuity Fund donates all GP profits to the nonprofit.
• The panel did not provide a specific forecast for when Israeli tech would recover, though participants expressed confidence that it would rebound.

Frameworks and Actionable Playbooks

• Crisis operating playbook: Use global teams to cover absences, identify backup personnel for critical roles, and support employees and families through extended disruptions.
• Corporate communications principle: Take positions selectively and authentically; distinguish core identity or fundamental issues from routine political debate.
• Sales playbook: Open with the customer’s business problem, product value, and measurable benefits. Be transparent about identity when relevant rather than hiding it.
• Down-market investing thesis: Assess underlying company quality and valuation when others are pulling back; do not treat market-wide uncertainty as proof that every opportunity is poor.
• Nonprofit coordination tactic: Identify organizations doing similar work and create grant or convening mechanisms that reward collaboration.
• Talent-development priority: Protect the pipeline through core education, broad workforce participation, and access to technology-sector opportunities beyond central Israel.

Presenters and Sources

The panel was hosted by the Israeli-American Council (IAC) and featured:

• Moderator: Dror Globerman
• Safra Catz: Oracle
• Udi Mokady: CyberArk
• Yasmin Lukatz: ICON and ICON Continuity Fund
• Simone Ledeen: Texas Venture Partners