The Upside to Traffic Snarls in Tel Aviv

Navigation and parking app makers draw foreign backers | “They can’t permanently fix infrastructure problems”

David Wainer

Number of tech startups in Tel Aviv, a city of 400,000

Tomer Neuner conceived of the Parko app when he was hunting for a parking space in Tel Aviv, circling his neighborhood on a sweltering summer day. “I thought to myself, there’s got to be a way to make the search more efficient for everyone,” says Neuner, 30, who quit his job as a product manager at financial-technology company Super-Derivatives to develop the app. Parko learns users’ habits by tracking their phones and predicts when they’re about to vacate a spot, alerting other drivers in the area. Neuner launched the app in Israel earlier this year and is planning to expand overseas, including to San Francisco and Paris.

Israel’s infrastructure problems, exemplified by Tel Aviv’s parking shortage and inadequate public transportation, has inspired some of the country’s best-known startups. In June, Google agreed to spend a reported $1.1 billion to acquire Waze, a social media mapping app featuring real-time traffic information, that was created on the outskirts of Tel Aviv. GetTaxi, which got its start in Tel Aviv before expanding internationally, has received investments of $30 million led by U.S. billionaire Len Blavatnik. “It’s the perfect combination of a place with space and transport problems and lots of companies willing to solve them,” Israeli venture capitalist Jon Medved says of Tel Aviv, which has 700 tech startups and a population of 400,000. Medved’s fund, OurCrowd, invested $350,000 in Parko.

Israeli roads are among the world’s most congested, trailing only Monaco, Singapore, Kuwait, and Jordan, according to World Bank data. Traffic jams mean bus delays, and public transportation remains a work in progress. Tel Aviv’s long-delayed light-rail system is still years from completion. (Jerusalem unveiled state-of-the-art light rail two years ago.)

A dearth of government information about public transport helped inspire Moovit, says co-founder Nir Erez. Launched in 2011 the app relies on user input to compile real-time data on bus and train arrivals. “If you can provide a solution to a problem, the word spreads out more easily,” says Erez, who has expanded Moovit to 13 countries, including Australia, Brazil, and the U.S. He says the app has more than 1 million users.

Tel Aviv Mayor Ron Huldai notes that such data-gathering is only a partial solution. “All these apps are helpful, but they can’t permanently fix infrastructure problems,” he says from the top floor of the Shalom Tower, where a once-neglected public library was converted into a free startup workspace overlooking the Mediterranean. Tel Aviv is lobbying the national government for special visas for startups, so it can attract more foreign tech entrepreneurs. While about 50 percent of Silicon Valley startup founders are foreign-born, businesses in Tel Aviv are mostly started by Israelis, says Avner Warner, the city’s director of international economic development.

Successful developers have a habit of leaving Tel Aviv behind, though. Waze moved some of its operations to Palo Alto; BillGuard, which helps consumers identify mischarges on their credit cards, maintains its original Tel Aviv office but has partly relocated to New York. Still, Medved, the venture capitalist, says there are advantages to being isolated from Silicon Valley. “For Israeli companies to excel in this space they’re going to have to continue to come up with great technologies, not just a cool user interface,” he says.

The bottom line Tel Aviv’s heavy traffic and weak infrastructure have made it a strong lab for navigation and parking apps.


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