Israelis and the Gulf states can work together in dozens of industries and areas now that Jerusalem and Abu Dhabi have agreed to normalise relations, according to the head of a major Israeli investment platform.
Jon Medved of OurCrowd, who has been making business trips to the UAE for 11 years, described last week’s agreement as “towering, in terms of its potential impact on the Israeli business environment and ecosystem”, adding: “There hasn’t been a lot of good news lately and this is unadulterated good news.”
Asked if he was surprised by it, he said: “It’s always surprising when it actually happens. I’ve been working this channel for years. Over the last couple of years you could really see it picking up. Things have been changing.
“For instance, I was invited to speak publicly, as an Israeli venture capitalist, in Abu Dhabi in December, in a conference sponsored by their sovereign wealth fund. That surprised me, especially since I was able to do interviews and talk to their press.
“When you put it all together it’s clear, but it’s never clear, because this could have taken another one, two, five years to happen. My sense is that we’ll now see additional countries signing up over the next year. There’s a bunch of them.”
Asked about the impetus for the agreement, he said “most people do things based on their own self-interest” but added that bilateral business relations would not just be one-way, with Emirati money investing in Israeli technology.
“The Emiratis are quite advanced, with their own start-up ecosystem. They’re also extraordinary investors worldwide. If you look at the best-performing funds in Europe, Asia, the US, there’s Emirati money everywhere. They’re not just good at it – they’re very good. World class.
“They look for a win-win, they’re not just passive investors. I was on a call yesterday with one of our partners. They were looking at how [the Emiratis] can take these products and introduce them to the broader Arab world. These guys are planning a trip to Mars – they’re the real deal.”
He said Emiratis were, in his experience, “wonderfully open, positive people of great integrity” and it was “incredibly exciting to be working with them,” but sounded a note of caution to Israeli companies looking to the Gulf.
Likening the feeling in Israeli businesses to that of the “gold rush” era, he urged his compatriots not to get “over-excited”. “Step back, be intelligent, be very cognisant that we’re building a long-term relationship. This is not about the quick buck, it’s about long-term ties.
“That’s the opportunity. What it does to the Israeli psyche is just unbelievable. We’ve always been ‘of the region’ but not ‘in the region’. It forced us either to leap over the region to Asia, planes taking circuitous routes to avoid certain airspaces, or focus almost excessively with the West.”
The agreement was about “common interests, challenges and dreams”, which had a profound effect on Israelis’ self-perception, he said. “It’ll take time to sink in, but you’re already seeing it. There’s very little Israelis agree on, but everybody’s in favour of it here.”
Medved has previously spoken of “waves of investment” into Israel: first of American money, then European, most recently China and South East Asia. Is Gulf Arab money the next wave? “Absolutely,” he says.
“They build on each other. The Chinese haven’t stopped, the Americans are investing more, even the South Americans and Africans now, so adding that last big financial group to this mix was really important. But this isn’t just about investment. It’s about joint ventures and technology transfers. It’s a true partnership.”
Finally, how will Israelis and Emiratis rub along together in business, given the different work cultures? “They are different, but we’re familiar with each other. Most Israelis understand Arabic, we can eat hummus with the best of them. There’s something warm and familiar about this. This is going to be an easier cultural fit. We’re cousins. Historically, ethnically, DNA and whatnot, this is extended family for us, so culturally we’re going to get along just fine.”