October 13, 2023

Israeli startup founders go to war: 'We're fighting for our home.'

Original source here.

Noy Leyb, cofounder of BachPlace; Ben Yellin, director of R&D at OncoHost; and Itamar Friedman, cofounder and CEO of Codium AI, and his wife.
  • Israel declared war against the Palestinian militant group Hamas, after violent attacks in Gaza.
  • More than 300,000 Israelis have been called to military service, including many tech workers.
  • Insider spoke with startup founders and VCs who are managing companies while aiding the war effort.

Oren Kandel picked up the phone at 10:12 pm Israel time, in a daze.

"I'm not sure if it's Wednesday today," he said when Insider reached him by phone, pausing to check how long it had been since Hamas attacked his country. "Yeah, four days. We're not really running on regular hours right now."

Kandel, 46, is the CEO and cofounder of Munch, an Israel-based startup that uses AI to find and edit the most compelling clips in video footage.

In the early hours of October 7, he said he was jarred awake by the ominous sound of sirens. He lives in Gedera, a small town about 25 miles north of Gaza, so these warnings happen from time to time. As is standard safety procedure, he moved to shelter.

"Then we heard another siren, and another, and we realized this was unusual," Kandel recalled. "Then the pictures started to unfold. So many inhumane acts taking place. It's beyond understanding."

By Sunday, October 8, Kandel was ready to volunteer and support Israel's military, the Israeli Defense Forces. He said hundreds of thousands of Israelis are doing the same, including other startup founders and CEOs.

Insider spoke with 15 startup founders, investors, and employees whose lives changed overnight when Hamas launched a terrorist attack on Israel. The next day, Israel had declared war on Hamas after one of the deadliest days in its history. Thousands of Israelis and Palestinians have died in the days following the initial Hamas attack, as the war intensifies.

Startup founders and employees have traveled back to Israel from their homes abroad to take up arms and defend their country. Others have halted or stepped away from business operations for now, dedicating their energy to fundraising and other support for the military and Israelis affected by the ongoing war.

"You have to be super sensitive," said Isaac Gili, the CEO of the generative AI video startup Shuffl, who reported for active duty with the Israeli army after the Hamas attack. "People lost relatives and friends. You can't just go back and work on stuff, you can't code when someone died."

The call to serve

In Israel, military service is mandatory for all citizens over 18. Men are required to serve with the IDF for 32 months and women must serve for 24 months. Afterwards, most Israelis are then enrolled in the military reserves until they turn 40 and can be called on in cases of emergency, like the current war with Hamas.

Due to the high concentration of tech workers in Israel, many of the more than 360,000 reservists who have come to the front lines usually spend their daily lives building and investing in tech companies. But because tech workers in Israel tend to be younger, they are the reservists being called up for active duty, said Jon Medved, the CEO of Israeli VC firm OurCrowd.

"The reality in Israel is that at least one person in every company has been called up," said David, a venture capitalist based in Israel who asked to not share his last name for his family's safety.

When the attack occurred on Saturday, David responded to his unit commander's call that morning, and arrived at the base by 1 pm to serve as a medic, he said.

"You realize this is not ordinary," David said. "You understand something is going on. The response from my unit commander was do nothing for an hour, stay put. That quickly changed to get onto base within less than an hour. The way it escalated was so fast."

That same day, 32-year-old Noy Leyb was in New York, busy building his early-stage startup BachPlace, a platform for planning bachelorette parties, alongside his cofounder and longtime business partner, Danielle Eisenberg. By Saturday afternoon, Leyb was on a plane back to Israel to join the effort to fight.

"It's pretty weird going from working every hour that you're awake to just not caring about anything else in the world," he said. His two brothers have also answered the call to serve as combat soldiers.

While Leyb has been called to serve, Eisenberg paused all company operations for the week in order to fundraise and seek donations for Israeli soldiers and citizens that were affected by the attacks.

"I have a pitch competition next week that I told them I'm going to withdraw from, because I mentally can't be there without him," she said. "The amount of support I've gotten from strangers, it brings me to tears honestly."

Eisenberg plans to resume working on her startup next week, and will host a fundraiser alongside 12 other startup founders on October 21, calling their work the Israel Relief Project.

Operating companies from a war zone

For other startups, business has continued even as some employees head to the front lines.

"The average company has gotten between 10% and 25% of their people called up," said Medved.

These startup founders and employees are using the skills they use every day like problem solving, multitasking and leading during the war effort. Some are even taking Zoom calls in between their time on duty.

"Some of these people are super people because they go to fight and then on their breaks, they're writing to their company or doing their coding or talking to customers," Medved said.

Even those not on active duty are finding ways to help. Kandel, who served in the Israeli military when he was young, decided to volunteer.

"I called everyone I know and asked to join up. Staying home, you just can't concentrate on your work so you need to help out," he said. "When I arrived, there were a lot of other people in the same situation. This is the Israeli way. We're fighting for our home."

Kandel has worked at Microsoft in Israel for a decade, then joined one of the country's government agencies. His LinkedIn profile lists a major stint as a CTO in the Office of the Prime Minister of Israel. Three years ago, he left to try startups.

Kandel and other volunteers, including another startup CEO and a VC firm partner, had five different projects up and running to support Israel's military in the field.

He declined to share specific projects, because he didn't want to give away sensitive military information. However, he said the work involves technologies such as complex data processing and cyberdefense.

"We are known to be advanced in terms of tech – in cyberintelligence and tech data gathering. You can imagine. We are taking advantage of everything we can lay our hands on and it's a lot," Kandel said.

While he's supporting Israel's military response,  Kandel is relying on his cofounder to lead the Tel Aviv-based company, which has 15 employees, all of them in Israel.

"I'm lucky to be a cofounder not a sole founder, so I'm relying on my cofounder," Kandel explained. "They are running it and I am taking backseat"

At the end of every day this week, before Kandel falls asleep, he said he gets updates on everything that's been done at Munch that day, and he gives feedback and makes any decisions that have to be made.

For Or Shoval, the cofounder and CEO of healthtech startup Remepy, the decision to answer the call to fight was easy.

"We're called a startup nation, and one of the facts is that we're playing a dual role — we're like normal people, but at the same time we're defenders of Israel, we have this responsibility," he said.

While Shoval heads to the front lines in southern Israel, his teammates back in Tel Aviv are working "day and night" to make sure that operations continue to run smoothly.

OncoHost, a biotech startup based in Binyamina, has had multiple employees deployed already, including the team's head of research and development, Ben Yellin, according to its CEO Ofer Sharon.

"The fact that we have a US-based team helps us greatly, but here in Israel we have taken a decision to continue with our mission," he said. "Between the sirens and rockets, and despite the atrocities we are seeing and hearing about every day."

Life continues during wartime

While families mourn the loss of loved ones lost and the search continues for those who remain lost, there was a stark reminder that life goes on.  

Itamar Friedman, the 41-year-old cofounder of CodiumAI, had already answered the call to serve in the military when he heard that his wife was going into labor with their third child.

He was given special permission to leave his unit for the birth of his son, who was born early in the morning on Thursday, he said.

"We had our first smile since Saturday, a baby boy born this morning," he said. "I think the physician said I was the first ever to go with a weapon, a gun, into a delivery."

No one can predict how long this war will last or to what extent the conflict will affect Israel's tech sector.  

But since Saturday, the international venture capital community has shown an outpouring of support for the country. Over 200 VC firms have signed a joint statement in support of Israel, and several others have signaled their support on social media, including Lightspeed Venture Partners. GGV Capital, Insight Partners, and other large firms started collecting donations as well.

"It's amazing to see how people rally together," Eisenberg said.