← What's Your Number?
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- [00:00]
Yonatan Adiri
Foreign.
- [00:04]
Michal Avram
You are listening to an art media podcast.
- [00:09]
Yonatan, what's your number this week?
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Yonatan Adiri
My number is 15. That is 15 people who are set to participate in a clinical trial of a human cornea that will be transplanted. This is the first time lab grown human cornea. It's done by an Israeli company called Precise Bio. The first one was done actually a couple of weeks ago in Rambam hospital in Haifa with a patient officially declared blind after losing sight for many, many years. And it has been received very well. Early signs are of regained eyesight. And so we have 14 more to go. So that's my number.
- [00:43]
Michal Avram
Mine is far less sci fi. It is 1200. 1200. This is the number of B manasha Jews from northeast India that are expected to immigrate to Israel by 2026. And there is going to be additional waves to, to follow in the next few years. The move here is really intended to bring the whole community, which I think people don't know a whole lot about, to Israel to kind of reunite them and get them away from the region where they currently live. Where there are ethnic tensions. They're kind of caught in the middle. Whose number wins?
- [01:18]
Yonatan Adiri
Your number wins big time. I love the number as a half Iraqi Jew whose family name on my mother's side is Babu, which is actually Indian, because my Baghdad family used to travel very often to India. So I have an affinity and I actually think it's the coolest number we had so far. So I'm all in. I'm vote Michal.
- [01:37]
Michal Avram
I'll take the win. I just thought it was so incredible that we still have these Jewish communities and, you know, various parts of the world. I don't have any Indian connection, but my family came from Morocco, Egypt, and, you know, just these groups of Jews in far flung corners of the world that are still making their way over. And for demographic purposes, this is not a huge number. But you know what? 1200 helps. So I will take the win. Let's move on.
- [02:05]
Yonatan Adiri
Let's move on.
- [02:13]
Michal Avram
All right, it's 6:30am Here in Palo Alto. It's early. Yonatan.
- [02:18]
Yonatan Adiri
Yeah, 4:30pm 4:30. Still some daylight in Israel, by the way. You know what, the fact that North Africa doesn't have Jews anymore or that Baghdad or, you know, Yemen or Syria or Lebanon, it's a sad story. There were, you know, super active Jewish communities there for so long. So, you know, we're talking about 1200 who kind of stayed in an esoteric place, but, you know, Zionism didn't mean that all of them had to come to Israel, they were expelled. So that's why we don't have them.
- [02:45]
Michal Avram
Around is really surprising to me sometimes living here for most of my life is that you even have American Jews who aren't fully aware of some of these communities. So I think it's good to highlight them when we can. It kind of gives some different angles on, on what's going on in the Middle East. So anyways, speaking of that, there was a lot that happened last week, a lot going on in the coming days. You know, it's not Thanksgiving everywhere in the world. So in Israel, things are kind of, it's business as usual. But we Talked already about MBS's visit with Trump, him coming to the White House. Some of the, you know, initial clarity on deals and investments that came out of that. Meanwhile, there was also a visit by an Indian delegation to Israel. So tell us a little bit about what the outcome was of that visit. You know, my understanding is one of the people who came was the Indian Commerce and Industry Minister.
- [03:39]
Yonatan Adiri
So I think overall what we're seeing is continuous lifting of the fog of war. It takes weeks. The return of the hostages was symbolic for the, you know, national mood, but from an economic perspective, it didn't move the needle that much. But the, the figures coming in from Q3, the number we provided last week, 12.4% annualized growth. The chairman of the bank of Israel about an hour ago decided to lower the interest rate by a quarter percent. That's another indication of, like, we're going back to normal. And even more than normal, even like heightened economic activity. And the visit from the Indian minister is actually part of this dynamic. Indian companies are now competing for the biggest Israeli infrastructure project, which is the metro for, for the center of Israel, 68 billion shekels, more than magnitude $20 billion worth of infrastructure released in an RFP or, you know, so Indian companies are here to compete. The fact that the minister comes with them, you know, we're tiny Israel. You kind of think of a 1.4 billion people empire whose Minister of Commerce comes in with a huge business delegation to take part in the awakening of the Israeli economy. Israel, you know, super encouraging. You know, it is also of strategic nature, obviously. India, Israel and so on. I will say one kind of frightening thing. Yesterday, Israel assassinated Hezbollah's chief of staff in his apartment in the Dahya neighborhood of Beirut. So, you know, there's been a bit of a tense 24 hours, but I would say overall economic activity is back to normal. I think you're right. This visit of the Indian minister and his delegation is yet another indication of that.
- [05:13]
Michal Avram
And one quick question for you, Yonatan, before we move on. Not to harp much more on MBS's visit, but what's the general mo Israel from the conversations you're having? Because I've been reading really mixed reactions to it as far as what it means for the Abraham Accords for any sort of continued normalization talks.
- [05:29]
Yonatan Adiri
Look, that fell way below the minimum expected from high Israeli echelons. I was in the UAE over the weekend. I met some top officials from the region who had intimate knowledge of what was expected. The UN resolution, Security Council resolution referring to the path of Palestinian statehood in a way was tailored for the visit of Mohammed bin Salman. His Excellency wanted to see this type of commitment being endorsed by Security Council. And the expectation was that as he raised the bar, he was going to at least provide a sense of clarity into the normalization, which he chose not to. And I can tell you in circles here in Israel, this was received as a cooling effect. I do remain very bullish on the normalization. I think it's probably not there yet.
- [06:17]
Michal Avram
On today's episode, we've got kind of a special different thing we're doing here. We are running a panel conversation that took place at the recent Z3 conference in Palo Alto, where I live. This was a one day event. It delves into world Jewry and Israel and the relationship between the two. It's been going on for a number of years, 10 years, I think. Really, really interesting conference. So many great speakers. They closed the day with Rachel Goldberg, Poland and John Polin, which was a very moving conversation, as you would expect. This particular panel, which I moderated, was all about the economic relationship between the US And Israel and some of the shifts that we've seen kind of from October 7th to today, just how it's changed over the last couple of years from various different perspectives, from kind of the, you know, the startup ecosystem, the investor ecosystem, philanthropy, which I didn't know a whole lot about and was really surprised by some of the shifts there. Plus of course, you know, what the panelists thought comes next. So we had some interesting speakers here. Omer Fine, who's the chief Economic Consul to the Western United States, lives here in San Francisco. Joyce, who's the president and CEO of the Jewish Community Federation of the Bay Area. And last but not least, Sean McGuire, partner at Sequoia Capital. I think we both know quite a bit about Sean. He has been a very staunch advocate for Israel and has not been afraid to put his neck out there, you know, often at great expense.
- [07:47]
Yonatan Adiri
It was a great panel and I think it's really a sort of classic what's your number Content. So I think, you know, listeners and viewers, you're gonna enjoy this one.
- [07:56]
Michal Avram
Well, I wish you had been there. You were there in spirit with me on a son. We'll have to get you to Palo Alto another time. Before we get to the panel, let's as usual, take a look at the Windex, the what's yous Number index that tracks the performance of publicly traded Israeli based or founded company. So that's coming up next. On to the Windex Yonatan. How are things looking?
- [08:19]
Yonatan Adiri
Yeah, okay. So Windex is in Burgundy territory. You know, it's not even red, blood red. Shedding seven. Yes, shedding 7.7% on the week. It was a week of red for S and P. And Nasdaq, the sister, you know, indices 1.65 for S&P, 2.2 for NASDAQ. You can't really expect Windex to rise when Palo Alto Networks, you know, sheds 10.8% on the week. So Palo Alto reporting actually very strong results and predictions, but completing an acquisition for $3.5 billion for a company called Chronosphere, which in cyber Providence is called an observatory, which is a very fancy word to say, you know, clever dashboard. And the market did not like that. So when you add CyberArk for 25 billion, chronograph for an extra three and a half, there is a sentiment in Wall street that says, hey, if there's such steady and strong growth, why is the company focused on these acquisitions? Is this the best use of shareholder capital? We also saw, if that's not enough Wix reporting Q3, again, very strong figures overall, but somewhat of a stagnant growth in the core products for WIX and a super fast growth for base 44. But again, the market did not like that the company shed 23.77% on the week, so almost lost a quarter of its market cap. We saw Monday.com also continuing to lose this week was eight and a half percent. So overall I think the digital space as it's impacted by AI, Israel's a bit vulnerable to that. And to be honest, not significant activity in the green. Nothing to write about like single percentages or really a bad week. Curious to hear your thoughts. And then I have a surprise for our listeners before we move on.
- [10:08]
Michal Avram
Okay, I don't even know what the surprise is. Look, I mean, to Be fair, the market didn't really like anything last week, so there's that. Right. And we'll get to a little bit on Nvidia later on. But, you know, if Nvidia can't please the world with insane numbers and insane continued growth, who can? I think there's this kind of the AI bubble spillover and the, the general market jitters impacting everyone. I do think what's going on with cyber is interesting, but I also think that, you know, part of our conversation with Yeni did go into is there a, a smaller, you know, cyber bubble that's building in Israel? There's so much value being created, but, you know, at some point the party stops and not everybody's got a chair.
- [10:51]
So.
- [10:51]
Yonatan Adiri
So that's actually a great segue. Just, you know, this is. We're nearing Thanksgiving and so not a lot of public activity in the stock market expected, you know, throughout December usually. That's sort of when, you know, we kind of get steady. Windex is performing at 19.98% in the green on an annualized basis, beating S and P for 8% and beating Nasdaq for 5.19. So after losing 7.7% this week, it is still far ahead of the overall indices. So let's see where this goes. But at least compared to this point year to date, Windex is doing pretty good in the green compared to S and P and Nasdaq.
- [11:33]
Michal Avram
Well, I guess that's something for some of us to be thankful for. It's be great if, you know, we could be thankful for all of these.
- [11:40]
Yonatan Adiri
Indices are, they're all in the green, so all our pensions for ones are doing well this year.
- [11:45]
Michal Avram
You're right.
- [11:45]
And I think we should do, you know, we're coming up on the end of the year. I think it's going to be really interesting to do an episode where we kind of look back at some of the stocks that really drove the Windex both up and down and do a recap. So. All right, let's move along. Yonatan. We're going to segue right into the panel conversation that took place at the recent Z3 conference in Palo Alto. Hope you enjoy.
- [12:13]
Hello, everybody. I'm Michal Avram. I'm a contributing editor at Fortune and a contributor at cnbc. And I am also the co host, along with Yonatanadili, of a podcast called what's yous Number? Which is produced by ARC Media.
- [12:27]
Some of you might be familiar with.
- [12:28]
Call Me Back, it's flagship podcast. This podcast. Oh thank you. Some fans. This panel is a collaboration between Z3 and what's yous Number? The podcast focuses on the Israeli economy and this will be running as an upcoming episode. So it's not live, but it is recorded and we will air it in the coming weeks. Onto the topic at hand, lots to get to the US Israel relationship is not only political, it is deeply economic, built on decades of fruitful collaboration. For decades, American aid and investment have underpinned Israel's security and growth, while Israeli innovation and resilience have inspired global confidence and provided ample opportunity for a return on those investments. Since October 7th, we've seen some shifts in this relationship, some positive, some worrying, and we are going to spend the next hour or so analyzing some of these changes and talking about what comes next with our expert panelists here. So quick introduction to the panelists. Joy Sisiski is the president and CEO of the Jewish Federation Bay Area. In her 10 years at the Federation, Joy has helped to steward more than $2 billion to Jewish and non sectarian causes locally, nationally and in Israel, making the Federation the largest funder of Jewish causes and one of the three large public foundations in the state of California. Omil Fine is Israel's chief economic consul to the US West coast, leading trade, investment and innovation partnerships across 17 states. A career diplomat and former chief of staff to Israel's Trade commissioner, he works to connect Israel's innovation economy with global partners and bridge communities through shared opportunity. And last but not least, we have Sean McGuire, whose name is very misleading, as he'll tell you. Sean has fans, clearly. Sean is a partner at Sequoia Capital. Before Sequoia, he founded a cybersecurity company, Expanse, which was acquired by Palo Alto Networks for 1.25 billion. He spent two years working in the US DoD, actually DoW, as it's now known, including a deployment to Afghanistan. And he is an active pro Israel voice online, does not shy away from controversy.
- [14:43]
Sean McGuire
I have a lot of enemies too.
- [14:46]
Michal Avram
Okay, you're in the right room. Apparently. This is a friendly audience. All right. So I want to start with just kind of taking us on a journey of again, these last two years and the shifts that we've seen. I think we all read the headlines of what's happening on a diplomatic, geopolitical level. But I want you to take us into the economic journey. Joy, I'm going to start with you. Give us a sense of sort of how your work at the Federation, what you were focused on, what the picture was like for Jewish philanthropy pre October 7th. What happened in the aftermath and since.
- [15:14]
Joy Sisiski
So the Jewish Federation is one of 150 federations across North America. We're one of the largest. We're in the top 20, including like top five, population wise. There are about 473,000 people living in Jewish households across the Bay Area. And the Federation, just for some context, manages about $2.4 billion. And they are mostly in donor advised funds. We also, of course, raise money through an annual campaign and we grant somewhere in the ballpark of $200 million every year. And they go to a variety of Jewish and non sectarian causes. About half of that stays local in the Bay Area and then the rest is distributed nationally and also in Israel and globally. So the Jewish community in the Bay Area has always been supporting Israel and always been giving to Israel. And then of course, October 7th happened and within days, hours, we opened an emergency mailbox. Federation has always been a place where people give in emergencies. And we mobilized and raised about $25 million in the weeks and months after October 7, which is about three times as much as we raise in unrestricted giving through our annual campaign. So the community really wanted to help in emergency relief and humanitarian efforts in Israel. So.
- [16:38]
Michal Avram
But I want you to also real briefly tell us sort of what's been the trajectory since then because things have been different. It's become a bit more contentious and polarizing for a number of reasons to give to Israel.
- [16:51]
Joy Sisiski
So at the start you didn't have to ask for money. People were sending money in through the website, through the mail, and it happened very quickly. Giving levels to Israel have since gone back to normal, pre October 7th levels, meaning people are not giving to Israel, even though I think it's taking up a lot of mindshare. So we hear from organizations a lot in the Bay Area that donors tell them that they're not going to give to them this year because they're really giving to Israel. But actually the data doesn't always support that. In fact, they may not be giving to those organizations, but they're also not giving to Israel. So I think over the course of the two years during the war, we saw a waning in interest in wanting to give to Israel. And also so there were rising needs here in the Bay Area that needed to be addressed at home, primarily around antisemitism. And we just saw the need in our own backyards to be helping to fight that fight, whether it was at city councils or in K12 spaces and everywhere else. So the last thing I'll just say is the Federation manages Community security across Northern California. That's over 200 Jewish day schools, synagogues, JCCS camps, you name it, preschools. And there has been a really significant need to increase security.
- [18:08]
Michal Avram
I, by the way, had no idea that this is something that the Federation oversees. Okay, thank you, Joy. We'll get back to a few of the things you said I want to dive deeper into. But omel give us your view. Kind of last two years, how have you seen this transition?
- [18:20]
Omer Fine
You know, from my suit in this very hot day, you can tell that I'm the only governmental person. Right. You know, in the panel, you and.
- [18:26]
Michal Avram
Sean dressed your parts.
- [18:27]
Sean McGuire
Yeah, yeah, yeah, yeah.
- [18:29]
Michal Avram
That's right.
- [18:30]
Omer Fine
That's true. I've served as Israel's chief Economic Counsel for the past three years. I've worked for the Israeli government for the last nine almost years. My work focuses on creating partnerships between Israeli startups and American corporates and investors. The Ministry of Economy and Industry has a network of 40 or 50 offices worldwide and are on west coast office in San Francisco and la. For my time here, what I saw was, I mean, big resilience, a word that was echoed so many times right, in the past two or three years. And how despite everything, the Israelis still come here and meet with every stakeholder that might be an opportunity for business or for deals. Despite everything, the magic still happen.
- [19:19]
Michal Avram
Sean, I know you have both a personal and a professional kind of view of the shifts over the last couple of years.
- [19:25]
Sean McGuire
Which one do you want?
- [19:27]
Michal Avram
Start with the personal, but the positive, short version, and then we'll get to the other stuff.
- [19:33]
Sean McGuire
All views are my own. They're not those of my employer, Sequoia Capital. So I view what's happening. I think it's very hard to understand things we're seeing if you just look on the ground or like in a small little neighborhood of ideas like go into outer space and look down on the earth and look in very long time cycles. And to me, you have some of these small changes post October 7th, but that are likely to become very big changes in the future. The Jews right now or Israel. This is just proxies in a much bigger great power struggle between. And it's complicated because through many different forces, it's not even one thing. It's east and west, it's capitalism versus socialism, you know, or it's democracy versus, you know, authoritarianism. There's these very, very big forces that cannily, Israel's not the target for a lot of these forces, like America is the target, but Israel is America's most Important ally. It's hard to target America directly. It's much easier to target Israel. It's much easier to try to cause chaos. Basically, there's three goals. It's caused chaos inside Israel, cause chaos inside America, and create a division between Israel and America which weakens both countries, but especially America.
- [20:54]
Michal Avram
By the way, this is the short, optimistic version.
- [20:57]
Sean McGuire
I just don't think you can talk about the two years and the economic things we're seeing without having a little bit of context. The last thing I'll say in terms of the context, I basically view that there's an economic war, there's an information war, and there's a physical war. And in terms of the physical war, Israel's been incredibly successful. America's been incredibly successful the last two years as well. What happened in Iran was very good for Israel and America. The fact that Ukraine was able to keep Russia at bay for three years has also been very good for the West. But on the information war side, we've gotten absolutely crushed. On the economic side, I would say so far it's probably been net positive in the last two years inside Israel as we lose hearts and minds, like there's a risk that on a 10 or 20 year time frame is, you know, significantly net negative. I have a lot of ideas about what we can do to help prevent that. But I think like to even talk about those ideas, you have to pop up a level. And I'll give you one example, like sadly talking about antisemitism no longer works. It should, you know, like anti Semitism is incredibly real. It's rising like crazy. You know, even a simple thing like Dave Portnoy, who's a entrepreneur and like podcaster, just yesterday some, you know, young right wing kid threw money at him and called him a dirty Jew. And like Dave didn't back down. You have these types of things happening. Semitism is rising like crazy, but we're at a point where people are so tired of antisemitism and young people feel like they just don't have the opportunities that they want or promised. And when you talk about antisemitism, their eyes glaze open. They're like, you don't get it. I want to talk about me. And so there's just like, we need new tactics. And I think to protect Israel and to protect the Israeli economy, you actually have to understand what's happening in America.
- [22:43]
Michal Avram
Can you also touch on as an investor, you know, early on the war breaks out, October 7th happens and a lot of, you know, what, 30% in some companies of the workforce gets called in. What was the reaction kind of around you and what did you actually end up seeing happening?
- [23:02]
Sean McGuire
So now with my Sequoia hat on. Sequoia had a long history investing in Israel, but starting in 2016, we slowed down our investments in Israel, just feeling like the outcomes were much smaller than in America or China. And starting in 2020, we started to invest a lot more. And basically 2020 until October 7th, we backed Wiz, we backed island, we backed Sire, we backed a bunch of very promising next generation companies. And there was a very distinct moment about a month after October 7th where one of my partners came in a partner meeting and he's like, we have an existential risk as a firm because we have so many investments in Israel. Like, how are they going to be able to perform while the country's at war? And while such a large fraction of employees, especially engineers, are called up for reserve duty and is a tricky thing. And in my head I knew, I was like, don't worry, you don't understand how resilient Israel is and the people are going to find a way to pick up the slack and perform. I didn't know if I fully believed it. So I was really waiting for the Q4 2023 numbers to come in. All these Israeli companies just had incredible Q4s, and I felt unbelievably proud at the time. It was a moment internally where I think everyone, all of my partners understood something is different in this ecosystem. Like these people, they have a higher purpose than just building a company the way a lot of founders do in other parts of the world. Like, this is survival. Joy.
- [24:32]
Michal Avram
I want to go back to a few things you said. Can you give us a deeper view into what role antisemitism has had in how money is being deployed now and where donors want it to go? And I'm also curious, kind of separate, but related. Earlier when we were talking, you did mention that this has become a more contentious issue within the philanthropic community as the war went on. And so can you give us a deeper dive into the kinds of conversations that you've been having, that you've been privy to?
- [25:02]
Joy Sisiski
I'll start by saying after October 7th, I mentioned we had raised a lot of money here. Across all federations, we raised nearly a billion dollars. That's a lot of money. All of it was deployed very quickly in emergency and humanitarian relief in Israel. Like there's no money really left to allocate. And there were some conversations about what the next step was. And I think there were some very early, maybe premature conversations about rebuilding Israel that have been put on hold till the end of the war. So those conversations are back on the table now. And I think, you know, it's a balance because of the high needs related to fighting antisemitism at the grassroots and security needs that local communities are in conflict because we want to do both of those things at the same time, so support Israel, but also make sure that we're taking care of things here at home. There are people in the audience here today who I know care a lot about grassroots work. I mentioned that a new organization was founded called the Bay Area center to Combat Antisemitism, Baca something that federation helped seed because it's really important that we're doing all of these things at the same time. I would be really worried if the community didn't have an interest in helping to rebuild Israel. The needs are extremely high, particularly around, so there are still some urgent and humanitarian related needs. And then, Sean, you know, you're talking about sort of the business of Israel and, you know, the two of you are really experts here, but like 70% of businesses in Israel are small businesses that have 10 or fewer employees. And how can we make opportunities available to the community to support those businesses, to help them continue to pay their employees when they're off on reserve duty? And I think that's something that I like to think about, or what is every lever that we can pull using philanthropy and the tools we have available to help Israel and to combat antisemitism here.
- [27:04]
Michal Avram
The two of you mentioned the resilience that we saw in the Israeli economy and the innovation sector, despite some of the huge disturbances to the workforce. You know, at the same time we also saw some systemic challenges. Can you talk about some of those challenges and ome if you can start?
- [27:20]
Sean McGuire
Yeah, sure.
- [27:21]
Omer Fine
I think the two main or three main challenges that I can think about would be one, the VCs are struggling with getting funds. And that's something that we've seen, you know, clearly in the past three years. I'm getting like zillion requests of how can you support us? Maybe another challenge will be, you know, the verticals that have been more favored, you know, in the past three years are for sure, cybersecurity and AI and maybe even defense. That's something we've seen in the past, you know, and after Yom Kippur. Right. So we saw Elbit and Rafael, you know, kind of industries that were created there, but other verticals are a bit struggling, like more of the Impact verticals, the food tech and the healthcare, you know, so that's maybe a second challenge.
- [28:09]
Michal Avram
Sean, maybe you can weigh in, but you could probably say that those verticals are struggling here as well as attention has kind of turned more towards AI in Israel, to cybersecurity for sure.
- [28:18]
Sean McGuire
Yeah, look, the Israeli tech ecosystem and just keeping it at that. I'm very optimistic and there's a lot of small struggles, but in aggregate I think the ecosystem is doing very well. I mean I've now been an Investor for almost 10 years and I'd say in the last two years the perception amongst Silicon Valley VCs in Silicon Valley community towards Israeli tech companies has 10x in terms of how much more favorably people view it. I think that comes from the obvious wins like Wiz. But more than that, it just feels like the Israeli ecosystem is now a machine where it's not luck. There have always been some incredible one off companies created in Israel, but now, I mean cybersecurity, there's a full machine to just generate company after company in cyber and that has extended into other areas and now we're seeing the early innings of it in AI in Israel. But it's very much a tale of haves and have nots. I'll just say with Joy's point around like 70% or so or whatever of the businesses in Israel are very small. But I, I don't know exactly the statistic, but very few people in Israel are lucky enough to work in high tech. It's not lost on me like how small high tech is relative to the whole kind of population. But high tech alone I think is doing very, very well. Everything else, it's a much more challenging.
- [29:41]
Michal Avram
Time even within hitech. Just to be clear, Omal, what you were referring to was the challenges that VCs that investors in Israel are having to raise their funds, right?
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Omer Fine
Correct. Not the founders, that's getting bigger. So we see that the startups raise the money maybe in different verticals. This kind of how you can split between the cyber, maybe the impact one. But VCs are really struggling.
- [30:05]
Michal Avram
It seems like everybody here and probably everybody in the room since October 7th has doubled down on Israel. That's great, but comes at a cost also. So if you know you're connecting Israeli investors trying to raise their funds to Jews elsewhere, is there an issue there down the road, 10, 20, however many years later that it becomes more of an insular ecosystem versus a global one.
- [30:32]
Sean McGuire
So there are a lot of people trying to isolate Israel right now. Like that is a Fact that said, I have a huge amount of optimism about Israel in general. One thing that I think people don't fully appreciate is they don't understand, like, how deep the historical relationship is between Israel and India. The first Jews went to India 2,300 years ago or so. There have been a bunch of waves of migration of Jews to India, including, like, Iraqi Jews in the late 1700s that the Suisun docks, which is the harbor in Mumbai, was built by Iraqi Jews. And there's an incredible shared history in terms of what had to deal with everything from British partition to Islamic conquest to very similar demographics just 100 times bigger in Israel. And I'm seeing the ties, like, in the last three or four years exploding between the two. There's also an incredibly deep shared history between Israel and Singapore. You know, like, Israel played a huge role in helping the modern city state of Singapore getting formed, advising, creating the military. You know, I could go through 50 other countries. You now have, you know, you have Kazakhstan joining the Abraham Accords this week, obviously, uae. I don't really feel any risk that Israel becomes truly isolated. I think the risk is that Israel is forced to pivot away from the west, pivot away from America and Europe to kind of the East. I think this is what a lot of America's enemies want. Like, they are trying to engineer this, and I think we have to do everything we can to try to prevent that from happening. I think that Israel has more flexibility here than America in a lot of ways, because, again, as I was saying earlier, I think America is the actual target. Don't get me wrong, Iran has historically wanted to target Israel, but things are changing dramatically in Iran, like, overnight. Like, I don't think people understand how successful Israel has been in weakening the Islamic regime's control over their own country. And you have huge numbers of videos now of women not wearing head coverings, like, in, like, big gatherings. There's a video yesterday of like a thousand plus women not wearing head coverings. Like, that would have been unimaginable a year ago. And it's basically the regime knows that they don't have the same level of control, and so they can't turn the screws as much as possible. They've also just in the last few weeks, it's pretty wild. But they are now, instead of, like, celebrating some of their Islamic, you know, the ayatollahs, faces everywhere, they're actually bringing back some of the ancient Iranian, ancient Persian Empire cultures. My wife is a Persian Jew, so I spend a lot of time families.
- [33:14]
Michal Avram
From Iran and eating Persian food.
- [33:16]
Sean McGuire
Eat a lot of Persian food. But I just like, sure, there are people that hate Israel and want to destroy Israel, but I really view it as a secondary target. And I know that's a controversial statement.
- [33:26]
Michal Avram
So tie that back for me if you can. And whoever wants to jump in as well, on what we're seeing there. I mean, I've definitely reported quite a bit on the BDS movement. Interesting note that there was an uptick in these kinds of movements during past ceasefires, which says a lot, but how big of a risk is this ultimately to Israel? And you know, with the caveat, of course, of what you were also saying earlier about new partnerships, about India, about the Abraham Accords, Kazakhstan joining now too, and potentially other partnerships down the line. The partnership and the affiliation ideologically and economically and in many, many ways with the west is hugely important.
- [34:08]
Omer Fine
I split it into two maybe scenarios that I've seen. One is anti Israeli movement. We would may reach out to someone and we would get the very, you know, nasty answer. I don't want to work with Israelis. But I think the other part, and this is what's more interesting, is those who are a bit, I would call it, afraid to be in affiliation with Israel. So it's not that they have anti Israeli, you know, opinions, but they are a bit scared of what's going to happen if it would be public. I've just had a case of an association we've worked with for many, many years and they've opened many doors for the Israeli industry in one of the impact verticals. And recently they've just been maybe a bit cooler with us when we asked for collaborations, at least my way of navigating this whole situation was to understand that right now maybe it's not, not a good time to go and demand this publicity, but make sure that at least I get what I can bring to the startups. This is interesting because I don't know how many association organizations I know, maybe VCs are not anti Israeli, but are a bit afraid of this public opinion.
- [35:27]
Joy Sisiski
Philanthropy is not immune to this either. And I'd say one of the services that we have seen an increase in over the last two years is really grant vetting of the grantees. So most of our donor advised funds are making grant recommendations at the federation and then we send the money out. Okay. And they're sending it to Jewish and non Jewish organizations we have had in this community for 15 years. Grant guidelines. They were originally created to make sure that there were some parameters around giving in Israel and they have since expanded. Just before October 7th, we realized that we needed to kind of modernize these. And I've worked at Federation for 10 years. I've been CEO for three years. Maybe once or twice a year a grant comes up that do not meet our criteria. We have to have a discussion whether or not this grant should be given or not. In the first 18 months after October 7, we were getting like sometimes like a dozen a week. My colleague's sitting here and she's in charge of making sure I review all of these because it became like a whole second job. And what I'm talking about are innocuous nonsectarian organizations that have declared their affiliation with the BDS movement or other anti Zionist or anti Semitic movements. And we do not allow a penny to go out the door, whether it's Federation directed or from a supporting org or from a donor advised fund that is in any way threatening Israel as a Jewish democratic state that promotes antisemitism or is really a threat to our own democracy here in the United States because we understand that the survival of the Jewish people is really wrapped up in that For American Jews as well. I will say that they came from a lot of different places that we didn't expect. The most notable one that people may have heard about is really the reproductive rights organizations. And in many cases they didn't even accept money that was coming from the Federation because they didn't want to be associated with anything Jewish. So you can see how this creeps into philanthropy and why donors, many times they need help sort of identifying to make sure that their values are aligned with the organization they're giving. And in some cases it's very hard to know. You have to do a lot of research.
- [37:46]
Michal Avram
That is fascinating. Can you talk a little bit more about Pre and post October 7th? What percentage of funds of Jewish giving actually went towards Jewish causes or and or Israel versus not. And how is that shifting now? Because of politics.
- [38:04]
Joy Sisiski
So typically pre October 7th and for decades really leading up to it, the split for Jewish giving and non sectarian giving is 40, 60. So only 40% of dollars out the door are going to Jewish causes. 60% are going to non sectarian. Here in the Bay Area, it's actually higher. In the year following October 7, Jewish giving went up. What we saw this past year, we're just still going through the data. Giving overall is actually down in the community. And that's a big question mark. Why? There are a couple of hypothesis there, but giving to Jewish causes has gone up for me, I think what we're seeing in my experience is a doubling down on being Jewish and what does it mean to be part of a people and how is that going to be expressed in all the different ways, including in Israel, but not only in Israel. So I don't know that giving to Israel will be sustained at the levels it was immediately after October 7th. But I can see that people want to be really involved in their Jewish communities in different ways. We know from data on what's called the surge, which is more people, it's a silver lining, joining synagogues, sending their kids today, schools to Jewish camps. So, you know, you would expect the philanthropy to follow that also.
- [39:20]
Michal Avram
Sean, can you talk a little bit about how this has been polarizing also just within the tech community? I mean, I definitely, I follow you on X, I see the back and forth, but has it been polarizing within the tech community and has that led to actual, like, have you lost deals over it? And bigger picture, how is that impacting Israel?
- [39:40]
Sean McGuire
I mean, I think it's polarizing even within Jewish families. And if it's polarizing within just Jewish families, then obviously it's polarizing in the much.
- [39:49]
Michal Avram
Okay, have you lost family members?
- [39:51]
Sean McGuire
So there's a lot to say. You know, I'm a former mathematician, physicist, PhD in mathematical physics. I was trained to try to solve simple problems. The thing that was going through my head is like, I would encourage people to try to think about how do you keep your own just family unit together and aligned on these issues. And from my perspective, you know, it's kind of the root because it becomes a vector that compounds and people will go, listen, oh, I have a Jewish friend that's anti Israel or whatever. And then it, it compounds from there. And the thing that's going through my head when I think about keeping families together, this issue is so complicated. I think Israel, Palestine is one of the most complicated topics in the world. I think truly getting up to speed there is just as hard as doing a PhD in quantum gravity. I've done both. I would say it's about the same level of complexity. How can people that don't live natively Israel, Palestine, how can you possibly get confidence or ground truth in an opinion? And when you see videos or images or whatever of atrocities, like, of course it plays your human empathy. And then if, if you hear a certain thing that was wrong or whatever, then you believe that Israel lies. My takeaway for the people here is like, I, I really think one of the most important thing each of us can do is to try to keep our own families pro Israel seeking the truth and also pro America. I think it'll compound more than people realize because I think people look to the opinion of Jews on these topics because they should be the experts on the one side.
- [41:30]
Michal Avram
So I want to spend the last bit of time that we have talking about some of the opportunities and some of the bright spots that we're seeing. And again, going back to this resilience in the Israeli economy and in the economic relationship between the US And Israel.
- [41:43]
What kind of new, you know, Joy.
- [41:45]
I want to go to you first. You mentioned impact investing. So what kind of new opportunities are there around impact investing and maybe other models as well? I mean, Israel is a very different place today than it was 10 years ago and definitely 20 years ago.
- [41:59]
Joy Sisiski
Yeah, I think the, the market for that has changed a lot as donor advised funds have grown. There's more pressure actually on donors to give away more money so that they are using it for good. That's something the federation really encourages when it comes to impact investing. That to me is just another lever. And one of the things that we did a few years ago was take a look at how donors were using their philanthropic capital. And in fact, a lot of it was sitting in cash and not being used at all. So I think there was something like $100 million sitting in cash where. And really what we learned is that people want to do good, so they have a windfall, they have an exit, they come into some money, so they open a fund, but then they don't actually know what to do with it. Or they can do some very, what I would call like the bread and butter of the Jewish community. Like you might want to join a jcc, you might want to join a synagogue. Things are, you know, a little bit more obvious because they're very close to your backyard. But really, what could we do if we put that capital to work? So we started opening loan funds to think about how we can support the needs in the community locally in Israel. And I think something like $9 million only recently has gone out to Israel in the last few years, which is catalytic capital to help people who are small business owners. And by the way, we work with all Israelis, including Israeli Arabs. I've gone to visit a lot of these businesses to see what they look like during the war and kind of support that they need. And it really makes a meaningful difference to these small business owners to know that they can take care of their families, especially if they're fighting for our behalf during the War and then you know, you have the whole issue of the Gaza envelope and also really the north where there are hundreds of thousands of people that have been displaced on and off through the war, many people who are not going to go home. It's too traumatic. So really what would it take to have first time homeowners, people who are maybe living in capable but sneer Oz or Bari, think about where they're going to live and how they're going to buy a first home. So how can we make that affordable to them here?
- [44:03]
Michal Avram
Amel, what are you seeing as the kind of new emerging opportunities both in Israel and Israeli innovation and in forming new types of partnerships?
- [44:12]
Omer Fine
You know, there's this model in management I really like. It's called, you laugh. It's called the garbage can model and it says that when you have a setup of what we call organized is chaos and you have a champions spirit, this is where you have new opportunities. And I feel that we're maybe in this place right now in a way. I expect great technologies, things that we haven't seen, of course, with AI all over. Sean spoke about the new markets and that's something we'll see. You know, with Kazakhstan, that's one. And you know, India. I think that these are the opportunities for the next few years.
- [44:54]
Michal Avram
And I know we're talking about us, Israel, but we're touching on the Abraham Accords as well. Of course. And you worked on the Abraham Accords on especially on uae, on the partnership with uae.
- [45:04]
Omer Fine
Correct.
- [45:05]
Michal Avram
How is the UAE a model for what's to come, hopefully with other countries? And what more could we be doing there?
- [45:11]
Omer Fine
I was part of the team that supported the first official initiatives back then in late 2020 and there was this big hype in Israel around this.
- [45:20]
Michal Avram
Going shopping in Dubai.
- [45:21]
Omer Fine
Exactly, yeah. This flood of opportunities, especially in impact verticals like ag tech and water tech and food tech. I really believe that these new markets can have the same model that we saw back in 2020 of opportunities in these areas. I expect that the same thing will happen here.
- [45:44]
Michal Avram
Sean, I'm curious. We did see startup formation go down over the last couple of years, but now with a ceasefire in effect, hopefully a lasting one, reserve is starting to come home. Out of hardship comes innovation. What do you expect that we'll be seeing?
- [46:00]
Sean McGuire
We're seeing huge numbers of startups being formed and so I don't know the actual data, but in terms of the number of things that we look at like as a percent of all of our investments globally, the number is just rising. Every year. And that's a function of the, the quality. It's hard for me to say if there's 5,000 startups formed a year or 7,000. For us, it's more like, you know, we're seeing five or six, like maximum promising companies a year. And I think we used to see one every five years in Israel. And so that gives me huge optimism. And it's part of why I've been spending so much time in Israel is it's just to me, it's the two ecosystems where I see the highest quality opportunities. At least in the west, it's San Francisco and it's Tel Aviv.
- [46:49]
Michal Avram
Okay, so any of you have any intel on when the SFO to Tel Aviv round trip direct flight is coming back and really hope. What can, what can we do?
- [46:59]
Sean McGuire
Maybe it'll be Starship, maybe it'll be a rocket before the airplanes are. I hope not. But I don't know.
- [47:06]
Michal Avram
I mean, it is critical that person to person interaction. Has some of that, that been lost over the last couple years? Because it just literally, technically, practically has been tougher to get to Israel. How do we get that back?
- [47:20]
Sean McGuire
Great question. It is still very hard. And I think it changes people's worldview when they come the first time. It's incredibly powerful. I am seeing like an increase in non Jews that are very successful business people going to Israel because I think they just see the success and like that's at the end of the day, like the Wiz acquisition, which is not done, but the announced potential acquisition, that alone changed the minds of kind of the most prominent people I know. And I can think of one person, I won't name them, but like a household name that he'd never been to Israel. And after that very prominent investor, he's like, I want to go and see what's happening. Success begins success. We have to use these things, like use Wiz as an opportunity. Be like, hey, do you want to go see the other best companies?
- [48:10]
Michal Avram
Okay, so we just need more $32 billion deals.
- [48:13]
Joy Sisiski
It is a good point. I haven't spent a lot of time thinking about it, but I've lived in New York, you know, for almost 18 years before I moved here. And when you get on a flight to Israel from New York, it looks very different than a flight you get onto Israel from San Francisco. And I think that is really important.
- [48:29]
Michal Avram
Joy Omil. Sean, thank you so much. I know we covered a lot of ground. Really appreciate being here.
- [48:34]
Thank you.
- [48:40]
Well, we hope you enjoyed that panel.
- [48:43]
Conversation from the Z3 conference. We're going to end our show with the words of the week. We always start with the numbers. We're going to end with the words. And I think I foreshadowed a little bit that this time I've still got Nvidia on my mind. I think we all do. How can you not? These are words from Nvidia CEO Jensen Huang. He was speaking to employees the day after the company reported its most recent quarterly earnings, which again blew past expectations. They reported 57 billion in revenue. Quarterly revenue, may I remind you, which was up 22% year over year. Stock, by the way, initially went up the day of earnings and then down. And this is what Jensen said. If we delivered a bad quarter, it is evidence there's an AI bubble. If we delivered a great quarter, we are fueling the AI bubble. If we were off by just a hair, if it looked even a little bit creaky, the whole world would have fallen apart. Basically what he's describing here is a no win situation. Given the current market jitters, it's kind of a crazy situation for this $5 trillion company to be in.
- [49:51]
Yonatan Adiri
When you brought in the scope, it's also MAG7R, such as a huge part of the American Stock Exchange. And the American Stock Exchange is almost 40% of the global stock exchange. Right. So the ripple effect of a bubble are going to be really huge. I do believe that when you look at the numbers, at least from Google and Microsoft, I don't know about Meta, but at least from Google and Microsoft, it's such a strong non AI related balance sheet and such a strong non AI related top line growth that I feel confident that the sort of locomotives are very strong and relatively, you know, safe. Clearly Nvidia, Nova, all those companies that are silicon driven companies are something to watch for. And maybe the tail end, it's getting very clear. There's not enough energy for all of this. It's getting very clear.
- [50:38]
Michal Avram
Yeah.
- [50:38]
And that's the problem Nvidia can't solve on its own. It truly does take an ecosystem and the government's intervention there. So sucks to be Jensen, but also, wow, can you imagine being Jensen?
- [50:52]
Yonatan Adiri
You know, my. One of my kids plays tennis and there's a very, very famous saying. I think it's Billie Jean King who said that pressure is privilege.
- [50:58]
Michal Avram
I'm not shedding any tears for Jensen quite yet.
- [51:02]
All right, that is it for today's show.
- [51:04]
Thank you for tuning into ARC Media's what's your number? We hope you found it interesting. And if you did. Please be sure to like subscribe rate review. You know the drill, but most importantly, please share it with others who you think will find it interesting. And if you want to make suggestions or share your feedback, please reach out to us at what's your number? @arcmedia.org.
- [51:31]
Yonatan Adiri
What's your Number? Is produced by Adam James Lavina Reddy Sound and video editing is done by Martin Wergo. The theme music, which we all love, is by Midnight Generation. I'm Yonatanadiri.
- [51:41]
Michal Avram
And I'm Michal Avram. See you back here next week.
- [51:44]
Yonatan Adiri
See you next week.
- [51:49]
Michal Avram
This podcast offers general business and economic information and is not a comprehensive summary for investment decisions. It does not recommend or solicit any investment strategy or security.