As we reflect on the whirlwind of 2020, it’s evident that the rapid digital transformation and tech sector growth experienced only gained more momentum in 2021. This momentum was driven by significant shifts in how businesses operate, all against the backdrop of the pandemic’s prolonged presence. Industries with historically slow innovation adoption were suddenly thrust into the digital age, creating a landscape ripe with exciting prospects for fresh products, collaborations, and innovative business models.
As we look to the future, the insurance sector is poised to follow in the footsteps of the banking industry. Embedded and open insurance models are gaining ground, promising new avenues for digitizing distribution channels and leveraging data as a competitive edge for insurers. On a broader scale, the year ahead presents global challenges and opportunities, including mounting global debt and the ever-increasing risks of climate change. These factors will compel businesses to think strategically and seek long-term sustainability solutions.
The Fintech sector, on the other hand, continues to be a hotbed of innovation. Key themes such as new payment technologies, regulatory technology (Regtech), environmental, social, and governance (ESG) considerations, Platform as a Service (PaaS), blockchain, and artificial intelligence (AI) are catalysts driving transformation in traditional financial services industries.
Israel has seen extraordinary growth, setting the stage for multinational corporations’ innovation endeavours. In 2020, investments in Israel’s high-tech industry reached unprecedented heights, with a staggering $10 billion flowing into startups across diverse sectors. But 2021 took everyone by surprise, shattering expectations with a whopping $25 billion in investments – nearly 2.5 times the previous year’s figure. What truly stood out was the shift towards later-stage funding rounds, with significantly larger sums per investment, a clear indication of the ecosystem’s maturity.
Fintech, in particular, commanded attention, with a remarkable 136% increase in the number of funded companies, collectively securing over $4.5 billion in investments. Remarkably, 17% of Israel’s unicorns (companies valued at over $1 billion) are from the Fintech and Insurtech realms, underlining the sector’s prominence and potential.