Startup nations | Israeli high-tech seeks to employ Arabs, Orthodox

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One of the key challenges facing the extraordinary tech industries in both Silicon Valley and Israel is the integration of minorities into the workforce. Unfortunately, members of minority communities are underrepresented at all levels in our high-tech hubs.

That is why the Israeli government has made it a top priority to help join our ultra-Orthodox and Arab sectors — two key communities underrepresented in the tech workforce — into the high-tech engine that keeps our economy humming. As the chief scientist in our Ministry of Economy, Avi Hasson, has said, “Innovation likes heterogeneity. The more role models there are, the better it will be.”

The ministry has adopted several far-reaching programs to this end, including subsidizing Arab employment in the technology sector and offering significant funding to Arab-run startups. Similar programs exist to encourage employment and entrepreneurship in the ultra-Orthodox sector.

We at the Israel Economic Mission to the West Coast along with the San Francisco–based Consulate General are leading one such initiative in collaboration with California-based UST Global, a multinational provider of information technology services and solutions.

UST Global works with Fortune 500 companies in identifying potential workers in countries where the companies plan to create R&D centers, equipping them with the necessary skill sets.

In Israel, UST Global recognized the enormous potential of members of the ultra-Orthodox and Arab sectors to contribute to the Israeli tech workforce. The company told us they were impressed with the magnitude of Israel’s talent in cybersecurity and decided to further develop Israel’s globally renowned cybersecurity epicenter. Therefore, it is examining the possibility of training thousands of potential employees from Israel’s ultra-Orthodox and Arab sectors to work in the field of cybersecurity and of creating several IT services centers that will hire them. We believe the results will be game-changing and worthy of emulation.

Startup of the Month

This month’s featured Israeli startup, Moovit, has an app that’s been called the Waze of public transportation. It uses crowdsourcing to provide users with the best, fastest way to get to their destinations via public transportation. The app works by integrating real-time information from both transit agencies and commuters. Aside from showing the best route, the app also lets users know when the next train or bus is coming, and where the nearest station is.

Moovit is in use in over 400 cities — including in the Bay Area — and in 31 languages. The ride-sharing service Lyft teamed up with Moovit last year in pilot programs in San Francisco and Los Angeles to allow users to request a Lyft pickup using the Moovit app. Moovit recently got an additional $50 million investment from key investors, including carmaker BMW.

Exit of the Month

2014 was a record year for Israeli exits — the point at which investors sell stakes to realize gains or losses — reaching close to a whopping $15 billion in value, according to PwC Israel. This was double the previous year’s numbers. The lion’s share came from the $9.8 billion raised in 18 IPOs. The other $5 billion came in mergers-and-acquisitions of Israeli firms.

This year may be even hotter, with several big beginning-of-the-year exits in just seven days’ time worth nearly $800 million.

The S.F.-based cloud storage giant Dropbox made its first foray into Israeli tech by acquiring CloudOn, a developer of mobile productivity tools, for a reported $150 million. CloudOn had previously raised $26 million from investors such as Silicon Valley–based venture capital funds TransLink Capital, Foundation Capital and Rembrandt Venture Partners.

Not to be outdone, e-commerce giant Amazon acquired Israeli startup Annapurna Labs for a reported $350 million in Amazon’s first Israel acquisition. Annapurna Labs is building what it terms the next-generation semiconductor platform. And Microsoft, with several Israeli acquisitions already under its belt, bought text analysis service Equivio for a reported $50 million to help bolster its Windows services.

Gili Ovadia is the S.F.-based Israeli consul for economic affairs to the West Coast.