China, Israel Collaborating on Tech Startups

China, Israel Collaborating on Tech Startups


Whether you’re at the bottom of the chain or the top, there’s no question that collaboration is key to any business success. It’s about working together for a common goal.

Two unlikely partners, China and Israel, are doing just that, increasingly co-operating and bridging their resources on billions of dollars’ worth of high-tech startups.

The phenomenon was discussed in January at an event dubbed Silicon Dragon Israel, held at the WeWork Sarona offices in Tel Aviv. Experts with their fingers on the pulse of Sino-Israeli ventures explained the many ways that the two nations complement each other’s desire for business development.

Their potential is not to be underestimated. Rebecca Fannin is the founder of Silicon Dragon, which boasts a network of 30,000 global executives, entrepreneurs, venture capitalists, and angel investors. She recently noted in Forbes that this year or next, “several mega-funded Chinese tech startups are poised to go public,” with a potential combined worth of a quarter-trillion dollars.

“More and more Israelis are making long trips to Beijing, Shanghai, Hangzhou and Shenzhen and elsewhere not to miss out,” she wrote of the attempts to catch this wave.

“This China-Israel link is set to grow as more and more deals are blocked between the U.S. and China,” she continued. “Chinese dealmakers will look to alternatives beyond Silicon Valley to park money, and importantly, to gain an edge in technology innovation.”

The Israel summit was the latest in a string of frequent Silicon Dragon events that have occurred globally since 2010.

Royi Benyossef, Developer Relations Manager of Samsung Next, explained that China is “mesmerized by Israel, and their technology exporting capabilities… The idea that it’s a ‘startup nation’ leads the Chinese to believe this is a place they want to invest in.”

Benyossef was on the panel entitled “How Key Asian Corporates are Leveraging Israel Tech Knowhow” with SingTel Innov8 VC Director of Investments Gil Prashker.

As expected, one must be prepared for differing cultural norms, cautioned Yahal Zilka, managing partner and co-founder of Magma Venture Partners. “It’s about building trust,” he noted on the panel called “Exploring the Israel-China Connection for Funding and Dealflow.”

Zilka points out that popular GPS mapping app Waze “failed twice, miserably” in China, “and it all had to do with trust, nothing else. It clearly is a different interaction, pace and activity.”

Avishai Silvershatz, managing partner at Infinity Group, warned to “be very careful.” His advice was to obviate any misunderstandings by “having local partners – and be willing to spend years learning” the cultural milieu and any potential pitfalls.

Zilka elaborated by saying the bureaucracy in China has “very complex structures”; one example was the 2016 governmental clampdown on outgoing currency, which caused a stir among foreign investors. Luckily, that only lasted about a year.

“In the same way that Trump says ‘America first,’ the Chinese are saying ‘China first,’” Silvershatz explained. “They want investments to go towards their own strategic interests and goals. This is the ‘party line.’ It’s government, then corporate.”

But that doesn’t seem to deter the billions of dollars in annual investments from both sides, with each eager to tap their respective breakthroughs.

This unusual relationship works so well because China is “different in organizational culture,” notes Israeli-born Daniel Galily, a former lecturer at Beijing-Geely University.

“The educational system in China places great emphasis on discipline and obedience to the superiors, while the Israeli educational system and the Israeli army encourage students and soldiers to think about new ideas, and to solve problems in situations of uncertainty,” Galily told The Edge. “The Chinese understand that, and so they strive to integrate the Israeli creativity to their economy, and also strive to learn how to combine creativity with their economy.”


Dave Gordon | Contributing Writer


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