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‘Startup nation’ at war: How Israel’s food tech sector is handing upheaval

November 1, 2023 - from the Food Dive:

"The country has been a hotbed for the tech sector, especially for food, but the Israel-Hamas war has put employee engagement and product development initiatives on hold.

"Between an increasingly difficult funding environment and key industry executives taken away from their everyday duties to join the IDF and support military personnel, it’s unclear if, and when, the category will recover from such upheaval.

"Some food tech startups have delayed media announcements and launch dates, and FoodTech IL, an international conference held in Tel Aviv each fall to showcase Israeli food innovation, was postponed indefinitely. The conference was originally slated to start on Nov. 7th.

"Imagindairy — an Israeli food tech startup focusing on producing dairy products without the cow — recently had to delay a major announcement due to the situation unfolding at home.

"Though 2022 brought challenges to the space in the form of failures in global food supply, macroeconomic declines and geopolitical tensions, according to Nir Goldstein, CEO of GFI Israel, the tragic events that have unfolded in recent weeks may pose an even greater threat.

"The Israeli region cultivates an environment suitable for funding as many executives in the space are familiar with each other, but this small population of executives means that an entire industry is affected when conflict erupts.

"'That six degrees of separation that exists elsewhere is much smaller in Israel, probably one or two degrees,' said Morris. Where these two degrees of separation may be advantageous in the investing arena, it has put a burden on the industry in recent weeks.

"The Bryan Cave Leighton Paisner firm has an Israeli base, and 15 minutes prior to Food Dive’s interview with Morris, he received a call from one of his colleagues there. He was calling from a bomb shelter.

"Relying on resilience, companies are determined to keep business running smoothly, he said.

"It may be these two degrees of separation that can keep businesses, such as Future Meat Technologies and Aleph Farms, afloat over the course of the conflicts as there have been glimmers of hope from those in the sector. "