The number of Israel-based blockchain and crypto-focused startups increased by 32% last year, a December 30 report from the Israeli Bitcoin Association confirmed.
The report noted that there were 150 active blockchain firms in the country in 2019. Toward the end of 2018, there were only 113 crypto-related companies operating in Israel. Out of these 113 companies, only 63 are operating today.
Information about the blockchain firms that have shut down is not available. The Israeli Bitcoin Association said this might be because these firms were not able to survive the past year.
While the report doesn’t include any details about the number of employees that may have worked at the reported firms, it mentioned that the staff size dropped significantly last year, especially when compared to 2018 and 2017. The data suggested that the majority of Israeli blockchain firms had only around (average) ten employees on their payroll.
The report noted that most of the crypto-related firms were startups, which had recently established their operations. Approximately 30% of currently active blockchain firms were founded in 2017 and about 30% in 2018.
Around 44% of crypto and blockchain-focused companies established last year in Israel claim they’re self-funded. About 42% say they secured capital from investors. Approximately 7% of the firms reportedly depend on independent income to fund their business operations.
Israel has become fairly well-known as a crypto and blockchain-friendly jurisdiction. The country is ranked 49th out of 190 on the ease of doing business index, the Doing Business 2019 report from the World Bank confirms. But the nation’s overall score also takes into consideration several challenges for business owners such as complications with paying taxes, with Israel ranked 90th out of 190. Enforcing contracts has also been a challenge for Israeli businesses. The country ranks 90th out of 190 in this area.
In August 2019, reports surfaced that the Capital Market, Insurance and Saving Authority, a division of the country’s Ministry of Finance, was planning to speed up the process of issuing licenses for blockchain and Fintech firms in Israel. The government agency was trying to encourage more local competition by providing operational licenses to more Fintech companies.