Globes and Statista rank Israel’s 100 fastest growing companies

This year’s top company is a travel-tech startup founded during the Covid pandemic.

This year’s fastest growing company in Israel is travel-tech company Holisto with average annual growth of about 460% between 2018 and 2021 and revenue of $15.1 million.

Holisto was founded in 2015 by CEO Eran Shust, CTO Avi Wortzel and CRO Dr. Shay Horovitz. It officially launched its product during the Covid pandemic. The timing saw its revenue grow from $86,000 in 2018 before the launch to $15.1 million in 2021.

Shust says that Holisto came out with the right product at the right time in the right market. The company has developed a technology based on AI that helps customers find the most suitable hotel bookings through a range of channels including travel agents, distributors and hotel chains.

He said, “After almost six years of development we decided to launch our product even though it was in the middle of the Covid pandemic. Our understanding was that people would continue to take vacations in hotels, and they would just do it as part of domestic tourism, without international flights. At the same time, price sensitivity would be higher, so they would look for better value offers. So we decided to launch the product, focusing on domestic tourism in the US.”

Shust adds that growth over the last two years is not only because of Covid. “You have to remember that the growth in question started during the Covid and not just over the last year. In fact, in complete contrast to the market situation in those years, which experienced declines, we grew significantly.”

As you grow and become a bigger company, is it more difficult to grow?

“I think the answer to this question depends on the point at which each company is, and the market in which it operates. The market in the US alone is worth an estimated at $28 billion. It is quite clear that the opportunity for growth here is huge, so we experience less difficulty. But it is important to remember that the way growth is measured may create the appearance of difficulty. If a company goes from $1 million to $10 million in the first year, and the following year jumps to $50 million, the growth percentages will be significantly higher in the first year (900% versus 500%).”

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Reasons for concern – the collapse of SPAC companies

But Holisto has quite a few reasons for concern these days. In a few weeks, Holisto is supposed to start trading on the Nasdaq, when it completes its merger with a SPAC company based on a valuation of $405 million. But judging by the recent past, it is likely that, as happened to the absolute majority of the tech companies that merged into a SPAC recently, Holisto will trade sharply down after the merger. In addition, like many of the companies that have merged into SPACs, Holisto is unprofitable: it ended 2021 with a net loss of $53.5 million.

Until a year ago, Holisto’s stunning growth might have attracted many investors. But in 2022, rising inflation, interest rate hikes and the growing fear of a recession in the world’s largest economies and in Israel have changed the rules of the game.

Today, in the shadow of macroeconomic changes, the emphasis in the market has shifted from rapid growth to a business model and profitability. The SPAC market has been particularly affected by these changes, with most SPAC-merged tech companies seeing their share price collapse this year.

Shust remains unfazed. “The tourism market is a very unique market. Every time the world experiences a crisis, this market knows how to make adjustments. It’s a market that is often driven by the strong emotional need of consumers, and they have accelerated the market to a potential recovery relatively quickly. You saw it after 9/11, after the crisis in 2008 and during the Covid pandemic. Even today in the US, with the economic uncertainty, when consumers were asked what their goals or objectives were, they ranked in first place to repay debts, and in second place by a small margin – to travel as much as possible.”

Methodology

“The Fastest Growing Companies in Israel” is a list of 100 companies based on CAGR (compound annual growth rate) in the period 2018-2021. This is the second year in which Globes is publishing the ranking of Statista’s fastest growing companies in Israel. These are the criteria and how the data was gathered.

The criteria

In order to be included in “The Fastest Growing Companies in Israel” ranking, companies must meet the following threshold conditions:

Revenue of NIS 300,000 or more in 2018.

Revenue of NIS 3 million or more in 2021.

Independence (not part of a group that consolidates its financial statements or a branch or office of an international company).

Headquartered in Israel.

Growth between 2018 and 2021 mainly organic (not through mergers and acquisitions).

If the company is publicly traded and was listed before 2018, the value of its shares must not have fallen by 50% or more since 2020.

Data gathering

The data gathering process was carried out on two tracks. The first was that in June 2022 an invitation to register as a candidate for the ranking was published on “Globes'” Hebrew and English websites. Registration was closed at the end of August. At the same time, Statista carried out a market survey to find relevant companies and actively approached them. Next, Statista put together a list of 1,000 companies identified at this stage – even before they had disclosed revenue figures – as likely to have high growth.

The companies to participate in the process and agreed to disclose their revenue numbers in order to facilitate the ranking. The companies were required to provide the data in writing, signed by a senior manager (generally the CEO or CFO). In addition, during the application phase, Statista analyzed the data of 536 public companies that are headquartered in Israel. Of these companies more than 150 where shortlisted and examined in detail in regard to organic growth and all relevant data points. To be shortlisted, companies had to meet the aforementioned criteria and a revenue growth of more than 8%.

Growth rate calculation

The CAGR was calculated on the basis of the figures supplied by the companies and in the designated currency (shekels or dollars). For the sake of comparison, all sums were converted to shekels according to the average rate of exchange reported by the company. The minimum CAGR required to be included in the ranking this year was 11.7%.

Introducing Statista

The survey was conducted by international data company Statista, one of the world’s leading data platforms for analyzing strategic markets, statistics and providing research findings.

Statista, which is headquartered in Germany and was founded in 2007, has more than 1,000 employees in 12 cities worldwide. Statista’s Research & Analysis Department conducts analyses and research for its customers, who include multinational corporations, more than 2,000 universities and technical schools, leading consultancy and management companies, advertising agencies, trade organizations, banks and financial institutions, political NGOs and many others. Partners to its project in the media and communications include The Financial Times, Forbes, The Independent, El Mundo, Frankfurter Allgemeine, Business Insider, and LinkedIn.

Disclaimer

In formulating the “Fastest Growing Companies in Israel” ranking, great efforts were made to obtain as much information as possible on companies worthy of inclusion. Despite these efforts, the ranking does not pretend to be complete. Many companies chose not to publicize their data; others did not participate for other reasons.

Published by Globes, Israel business news – en.globes.co.il – on December 1, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.