Voluntary Enlistment Amid '300,000 Conscription Order'
Emergency Measures and Support for Affected Employees
As the war between Israel and Palestine began following airstrikes by the Palestinian armed faction Hamas, concerns are rising that Israel's high-tech and startup industries, which are key pillars of its economy, will face major turmoil. With Israeli tech personnel, including startup founders, being drafted or voluntarily enlisting as soldiers, and geopolitical uncertainties increasing, there are also forecasts that investment funds flowing into Israel could be cut off.
According to the Wall Street Journal (WSJ) and Bloomberg News on the 9th (local time), Israel has mobilized an unprecedented 300,000 reservists in response to Hamas's airstrikes, leading executives and employees working at Israel-based startups to join the military one after another. Each company is preparing emergency measures to prevent business disruptions when employees are deployed, while also checking on the safety of their staff and providing support to those affected.
Startup founders have taken the lead. Itamar Friedman, founder and CEO of the Israeli AI startup CodiumAI, announced that he enlisted as a reservist, saying, "I want to be part of those defending the homeland." After discussing with his pregnant wife, he decided to enlist and instructed about 20 team members never to work alone but to pair up and work together remotely if necessary.
Noam Schwartz, founder of ActiveFence, a cybersecurity company headquartered in New York and Tel Aviv, is also preparing for the possibility of returning to Israel from the U.S. for military service, but stated that the company will continue providing customer service.
Not only founders but employees are also increasingly leaving for military service. Avi Eyal, co-founder and managing partner of global venture firm Entr?e Capital, estimated that most Israeli startups are mobilizing 10-30% of their employees for this war. Eric Reiner, founder of New York-based venture capital firm Vine Ventures, said some Israeli startups have mobilized half of their staff for the conflict.
In fact, cybersecurity software companies Pentera and Armis revealed that at least 10% of their Israel-based employees have joined the military.
The WSJ reported, "(Israel-based) venture companies and startup founders are managing their businesses while employees and executives are being deployed, and are striving to protect their staff," adding, "This crisis is a new challenge hitting the Israeli startup market, which was already weakened by the global tech downturn and recent political divisions surrounding judicial reforms in Israel."
The high-tech industry has been the fastest-growing sector in Israel for decades and is a core industry driving the country's economic growth. Major foreign media reported that it accounted for one-fifth of Israel's gross domestic product (GDP) and 14% of jobs.
As Israeli startups go through this period of turmoil, venture investors who have invested in or shown interest in this market are closely monitoring the situation. Some express concerns that foreign companies might relocate capital outside Israel and that overseas investment inflows could sharply decline, potentially causing local startups to wither.
However, messages of support and relief efforts have been continuously coming from Silicon Valley in the U.S., which has long maintained close ties with Israeli startups.
Insight Partners, a VC firm headquartered in New York, announced a donation of $1 million (approximately 1.35 billion KRW) to Israel. The company stated, "Since 2004, we have supported Israel's advanced technology ecosystem. We deeply regret the attacks that have inevitably affected our colleagues, friends, and innocent citizens."
Another VC firm, General Catalyst, which collaborates with several Israel-based companies, also pledged $250,000 for humanitarian activities in the region. Additionally, Silicon Valley venture firms such as DCVC and Redpoint Ventures have promised support.
Meanwhile, global big tech companies that use Israel as a "research hub" are on high alert. Currently, over 500 multinational companies, including Meta, Google, and Apple, operate offices in Israel. Intel, which has maintained close ties with Israel for 50 years, is expected to be significantly affected by this war.
High-tech events held in Israel are already facing disruptions. Notably, Nvidia, the world's largest AI semiconductor company, canceled the "AI Summit" scheduled for October 15-16 in Tel Aviv, Israel.
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