Israeli-linked firms continue to thrive in Mass.
When Lior Div was thinking of expanding the cybersecurity company he cofounded in 2012 in Israel to the United States, he said his top three choices were San Francisco, San Francisco, and San Francisco. Boston was a very distant fifth.
“Boston is not the first name that you will hear,” Div said about Israeli technology companies looking to have an American presence. “But when you do the math, Boston is the answer.”
Div, chief executive of Cybereason, said Boston ultimately beat out Silicon Valley and New York for the company’s headquarters because of its proximity to Tel Aviv and its tech and cybersecurity talent pool.
Cybereason is among the growing number of Israeli-founded companies calling Massachusetts home and establishing a role as major contributors to the state’s economy. A new study released Wednesday by the New England-Israel Business Council found that companies with ties to Israel experienced significant growth in revenue and jobs in a span of three years.
At least 200 businesses with Israeli connections employed nearly 9,000 workers in Massachusetts and generated $9.3 billion in revenue last year, according to the study. The group’s prior study found about the same number of businesses employed 6,700 and generated $6.2 billion in revenue in 2012.
Most of the growth spanned sectors including app development, cybersecurity, data storage, medical devices, biopharmaceuticals, energy and water technology, and 3-D printing, the report said.
The results of the study are expected to be announced Wednesday at an event at the MIT Sloan School of Management before Governor Charlie Baker and more than 300 business and government leaders.
“What’s attracting them is our enormous talent pool, our capital, the startup ecosystem, and East Coast time,” said David Goodtree, board member at the New England-Israel Business Council and author of the study. “The synonym for innovation is ‘Silicon Valley,’ and the truth is some of the world’s greatest innovations today, in the future, and in the past come from here. Certainly we beat New York; we have more startups, scaleups, and IPOs than New York.”
From 2013 to 2015, the report found that 48 Israeli-founded companies in Massachusetts secured nearly $1.2 billion in venture capital investments, making up 10 percent of all venture capital funds raised in the state. Most of the capital was raised in 2015.
In coming to Boston, Cybereason was able to raise close to $90 million from investors in that same two-year period, Div said. In August, the company plans to move out of its Berkeley Street headquarters and take over an entire floor at 200 Clarendon, formerly the Hancock Tower. Div said the company will add 80 jobs, most of them in Boston, by the end of the year.
“The fact that more entrepreneurs choose to come to Boston independently, to me, is fascinating,” Div said. “Basically we moved very quickly from three founders sitting on a sofa in 2012, to a 120-people company today with offices in Tel Aviv, Boston, and Tokyo.”
Israel, with a population of 8 million, is second only to India, with a population of 1.2 billion, in the number of entrepreneurs working in tech companies in Massachusetts, according to the study.
Another asset is the international exposure Massachusetts gets from its higher education community, Goodtree said. About 30 percent of the 200 local companies with connections to Israel were founded by Israeli alumni of Massachusetts colleges and universities, the study found.
Another important advantage for Boston was the introduction of nonstop flights between Logan and Tel Aviv, Goodtree said. The study found that Boston was cheaper than New York and San Francisco in travel costs between Israel over one week.
“For each year we’ve done the study, we see phenomenal growth,” Goodtree said. “Problem is, we need to get out in the world and tell our story, because our reality is much higher than we are currently perceived.”
Correction: An earlier version of this story misspelled Lior Div’s last name.