How Israel became foodtech’s Silicon Valley

In November 2020, in a nondescript building on a busy road, a group of diners tucked into juicy burgers in toasted brioche buns. The restaurant was elegant with low lighting and soft music. Each dish received rave reviews.

But it wasn’t culinary prowess that saw locals sign up to months-long waiting lists, or journalists traipse thousands of miles for a chance at a table at The Chicken. No. That tiny restaurant in the middle of a science park made global headlines because it was the first in the world to be licensed to cook its high-end dishes using cultivated meat, created in an adjacent lab by food tech startup SuperMeat.

And strange as it might seem, it was no coincidence that it opened its doors not in New York, LA or London, but in the small Israeli town of Ness Ziona.

Geographically, Israel is tiny, with a population scarcely bigger than London. But on the global food tech scene it’s a heavyweight, with some 400 foodtech startups now up and running in the country. Some are working on the first cultivated salmon fillet, while others are analysing the biological structures of breast milk to apply its functionality to cereal bars.

They’re attracting major investments too. Although, as in the rest of world, the money poured into food tech declined in 2022, Israel’s ecosystem of startups attracted $866m in 2021, up from $53m in 2015, according to that year’s IVC-Meitar Tech Review. Last year, the country was second only to the US in terms of alternative protein investment, with around 15% of total global investment injected into its network of innovators. Not bad, given its landmass would fit inside the US 400 times over. So, what’s its secret?

Well, it’s not for nothing Israel is dubbed ‘the startup nation’, with entrepreneurialism a key driver of its economic growth. “Israel is a small country not rich in natural resources, which pushes Israelis to entrepreneurship,” says Aviv Oren, director of business engagement and innovation at the Good Food Institute Israel.

And tech, requiring a smaller geographical footprint to develop and scale, has often been where ambitious entrepreneurs focused their efforts. It’s why the country punches way above its weight in sectors such as cybersecurity, medtech and semiconductors. That meant when food was simply about, well, food, it didn’t hold huge interest for Israeli’s high-tech aficionados. “Israel is a relatively small consumer market so food wasn’t on the tech radar stream until 10 years ago,” points out Eli Nir, senior investment partner at OurCrowd.

But when in 2013 Dutch scientist Mark Post debuted the world’s first $300k cultivated meat burger at a press conference in London, the country’s tech community sat up and took notice. By 2015, 124 food tech startups were jostling for space in Israel, including three of the world’s first eight cultivated meat companies – Aleph Farms, SuperMeat and Believer Meats. From 2013 to 2018, foodtech investment doubled to $100m, according to Invest in Israel, and by October 2019 had spiked to $135m total, nearly tripling foodtech’s annual investment in the span of six years.

From this rapid start, Israel’s infrastructure – the same infrastructure that has helped it dominate other high-tech sectors – has kicked in. “In Israel we have a unique combination of an entrepreneurial culture, know-how accumulated around agriculture, biotech and data, and beyond that a very tight structure, both on formal and informal levels,” says Noga Sela Shalev, CEO at food tech incubator Fresh Start.

Informally, there’s a close relationship between academia and industry, allowing for what she calls “tech transfer.” In cultivated meat, say, early-stage startups could quickly draw on stem cell research being built up in the country’s established medtech sector.

And “beyond that we have formal structures put together by the government to support innovation as a whole,” adds Sela Shalev. There are plenty of recent examples of the Israeli government channelling cash and support toward the sector. In January, for example, the Israel Innovation Authority announced a government bid to provide up to $14.6m of funding for fermentation technologies and foodtech has even been declared a national research priority by the country’s National Council for Civilian Research and Development.

Why? “The Israeli government understands that the alternative protein sector is a strategic asset to diplomacy and national food security and is an economic growth engine that will generate tens of thousands of jobs and billions in tax revenue,” says Oren.

But they aren’t alone in spotting the huge potential in foodtech. And as other global heavyweights like the US and the UK, ramp up their own efforts, can Israel continue to hold its own? “It’s happened in the past,” says Nir. “In cybersecurity and AI, although Israel represents [a fraction of the global population] it’s holding its spot in the top three places in terms of the amount of companies globally in these sectors. So it can happen.”