Masayoshi Son and the Israeli Wonders
SoftBank's favorites among Israeli-related startups—Lemonade, Compass, and WeWork—promise to disrupt the existing order
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The Lemonade deal follows a $450 million investment by SoftBank Vision Fund in Compass, an online real estate listings service founded by Israeli-born Ori Allon. In August, SoftBank led a $4.4 billion funding round into shared office space company WeWork, co-founded by Israeli-born Adam Neumann. In past interviews, Mr. Neumann referred to his experiences living in a Kibbutz near the Gaza strip as an inspiration for WeWork, and some of the earliest investors in the company hail from Israel’s vibrant venture capital scene.
SoftBank doesn’t invest easily, and according to reports, it demands—and attains especially comfortable contracts in terms of company valuation and level of equity. But an investment from SoftBank means more than money. It comes with a quality assurance seal and exposure that opens many doors.
Softbank also invested two years ago in Israeli-founded cybersecurity company Cybereason Labs, but the new deals suggest a shift. Often, international companies look to Israel for technical creativity. Softbank’s recent investments went into operational businesses disrupting existing markets.
Lemonade’s managers, like Messrs. Allon and Neumann, understand that to disrupt a global industry they must first disrupt its biggest market, namely the U.S. Only in the U.S. and in China companies can quickly grow from a technological venture into a world-changing platform.