For now, Israeli-American Fairmatic insurtech founder Jonathan Matus is pushing ahead with plans to build an R&D center in Tel Aviv, warning that if the judicial changes are implemented he will have to rethink whether Israel is a viable location for doing business.
“If there is going to be a constitutional crisis, and Israel becomes a dictatorship, I will have to have a conversation with my board, because I have a fiduciary duty, not only to build the best product and serve our customers, but also to to protect. interests of our investors,” Matus told The Times of Israel during an interview on Thursday. “My story is an unusual one. I am not the CEO of Israel who is thinking of leaving, I am a global CEO who is entering the country, but there are others here and some of them are the biggest employers in Israel, in the technology engine, such as Facebook, Microsoft. , and Intel, much bigger than me, but they have similar circumstances.”
“If my board needs to look again at our strategy to build an R&D office here, it will not be dramatic, but for huge corporations that contribute billions of shekels to the tax system here that have many employees and families — for them. will be a catastrophic event,” he said.
Entrepreneurs and tech workers were among the various groups loudly protesting the judicial overhaul on the grounds that it would erode Israeli democracy and weaken checks and balances. The shekel hit a four-year low against the dollar this week as Prime Minister Benjamin Netanyahu’s coalition pushed ahead with legislation that would give government control over the appointment of judges, including High Court judges, and all but remove the High Court’s ability to review. and removing legislation.
One of the biggest concerns in the tech sector is that these moves will discourage venture capitalists and other money makers from investing their money in the country, which will encourage an outflow of funds. Unicorn Tech Israel Riskified is the latest local firm to announce that they would be moving $500 million out of the country and are offering a limited number of relocation packages to interested staff.
“Companies want to build their businesses and create jobs here, but they’re looking at what’s happening and they’re afraid,” Matus said.
Fairmatic team at R&D hub in Tel Aviv. (Courtesy)
Founded in 2022, US corporation Fairmatic has developed AI and data-driven technology for commercial auto insurance fleets of cars that track driving behavior such as hard braking, rapid acceleration, speed and phone use to encourage and improve safer driving and reduce risk. Driving performance monitoring creates a more personalized insurance option to determine and adjust premium pricing according to the performance of commercial fleet drivers.
Last week, the startup raised $46 million just six months after securing $42 million in a Series A round. The latest round was led by Battery Ventures and Bridge Bank, along with existing investors with includes Foundation Capital, Aquiline Technology Growth and with the support of technology angel investors, such as Yahoo co-founder Jerry Yang.
With the new capital, Matus is realizing a long-sought dream of opening a presence in Israel with the launch of an R&D center. Born in New York and raised in Tel Aviv, the entrepreneur spent his career working for Google and Facebook in the US and Asia Pacific before founding mobility risk intelligence platform Zendrive in 2013.
“As someone who grew up here and spent 20 years in Silicon Valley, it’s always been a dream to come to the ecosystem here and although some of those efforts are challenging due to recent developments, I’m still very much committed. to give back to the community, the people and the economy,” said Matus. “I also believe that the talent here in Israel is the best in the world.”
The Tel Aviv location, where the auto insurance startup plans to hire about 30 engineers, data scientists and product managers, is adding to the R&D hub it operates in India and its presence in the States United, taking its team to around 90 people. The startup recently tapped Guy Shaviv, a former NASA researcher who managed Israel’s R&D centers, to lead the engineering team in Tel Aviv.
“In Tel Aviv, we’re about a third or halfway through the hiring,” Matus said. “Next year, we’ll probably double and in the US we’ll grow from 15 to about 30 employees.”
Tech workers protest against the government’s judicial reform, with a sign reading, ‘Time is running out for Israeli high technology,’ in Tel Aviv, on March 23, 2023. (Avshalom Sassoni/Flash90)
The former Android and Facebook mobile executive, who calls himself a Zionist, says coming back to Israel for good is not an option, citing his family ties and geographic distances.
“I have an American wife and child so we decided to live in Europe, and we chose Portugal, which is halfway between the grandparents in Tel Aviv and the grandparents in New York,” he explained.
However, Matus now regularly comes to Israel to personally interview and hire engineers for the Tel Aviv hub.
“During the interviews, I suddenly noticed an alarming number of conversations where I mentioned to people that I live in Portugal and became the center of discussion,” said Matus. “Some of the questions that come up are: What is the resettlement policy? Are you planning to build an office in Portugal? If I join you now, and in six months I move to Greece, can I still keep my job?”
Although the questions surprised him at first, Matus says he has a lot of sympathy for the people who are raising these questions.
“I share their fears and concerns about the democratic nature of Israel,” he said. “I’m an optimist and I hope there’s a graceful way forward.”
Employees of an Israeli technology company stage a protest in Tel Aviv against a judicial overhaul, January 21, 2023. (Courtesy)
“But if we’re going to have a constitutional disaster in a week or two, there will be more people looking for opportunities to work with global companies to seek relocation packages, which will only hurt and hurt more. Israel’s economy at a time when it is already fragile,” Matus warned.
Meanwhile, senior Israeli tech executives are said to be in discussions with European countries, including Greece, Cyprus and Portugal regarding relocation. Greek ministers and diplomats, as well as other senior government officials, have reportedly held several meetings with Israeli entrepreneurs recently in an attempt to persuade them to relocate.
During the meetings, Israeli executives were presented with generous resettlement packages, including tax breaks, fast-track citizenship, and the construction of special neighborhoods with schools and offices for them and their families.
“There are many strong conditions for Israelis in Portugal including the immigration process, a treaty-friendly tax policy, and the cost of living is much lower,” Matus said.
Recently, Matus came to Tel Aviv to take part in demonstrations against the changes to Israel’s judicial system adding that protests taking place this week and the weekend are “critical” in the process of the proposed legislation, something he is afraid of. Israel’s democracy would turn into a dictatorship. That’s how the coalition government has said it wants to enact all its major reforms by the time the Knesset breaks for Passover, in a little over two weeks.
Matus says he also feels a great sense of anxiety and urgency when he talks to his tech colleagues, both in Israel and abroad because the tech community is already in a very difficult funding situation.
“All the big tech companies are tightening their belts, valuations are going down, and the recent blow-up on Silicon Valley Bank has created some cracks in the entire startup funding system,” Matus explained. “All this is already creating a very fragile environment for start-ups here in Israel and on top of that the VC investors don’t want to put their money to work in areas where there is legal protection status for IP and ownership or your civil rights. could be up in arms.”
“There is a fear that Israel could become a pariah state, an isolated country that people do not want to do business with. I hope that is not the case. But that’s part of the discussion going on right now.”
