Investing in Israeli Sports & Entertainment

Israel’s consumer tech scene is quietly taking off — and sports & entertainment companies are leading the charge.

There’s a long-running narrative that Israel doesn’t produce great consumer startups.

Here’s the argument… Israel’s a country of less than ten million people. To get to venture-scale, Israeli consumer startups must sell internationally early on. From abroad, it’s incredibly difficult to 1) understand your customer and 2) build the right distribution relationships. Hence, most Israeli VC-backed startups cluster around B2B and hard tech industries like cybersecurity.

But Israeli B2C startups are increasingly thriving. VC funding of Israeli consumer tech startups grew 7X from 2013-2023. And in the last couple years, we’ve seen multiple large exits across categories. For example:

• Oddity, a DTC beauty and wellness company, IPO’d at $2.3B in 2023

• Resident, an online mattress and bedding retailer, sold for $1B in 2024

• eToro, a stock and crypto trading platform, IPO’d at $4.3B in May

Looking forward, we’ll likely see more success stories, thanks to a few tailwinds.

1. Israel’s early consumer successes are incubating more great founder talent to launch new startups. For example, the mobile gaming giant Playtika IPO in 2021. A few Playtika alumni left to start the studio Superplay, which they sold back to Playtika for $1.95B in 2024.

2. Digital marketing and product-building are increasingly driven by data science as opposed to intuition – and that favors Israel’s deep pools of technical talent. Consumer startups are using more A/B testing, advanced analytics and machine learning to fine-tune product features, personalize user journeys, and optimize marketing funnels.

3. As Israel grows GDP and expands trade relationships, Israelis will only become more culturally connected to the rest of the world and interested in building for international consumers. Since the 2023 Abraham Accords Israel’s significantly boosted trade with the UAE, and many are now asking what a potential Saudi Arabian normalization agreement could bring.

At Will Ventures, we’re excited by the growth of Israel’s consumer tech sector – because it’s giving rise to more startups in the sectors we cover: sports, media and entertainment.

In fact, Israel has already produced major outcomes across these sectors. Here’s a sampling of ten VC-backed startups that have all have either exited or raised large growth rounds in the last five years.

(It’s worth noting: These aren’t just B2C startups, but also B2B startups that power consumer businesses. For example, IronSource is a B2B player that provides critical infrastructure for B2C gaming companies.)

As these companies inspire the next wave of founders, we expect to see more great Israeli companies emerge across sports, media and entertainment. Specifically, I’ll highlight three spaces that I believe are primed for growth in Israel.

1. Gaming

2. Media Production

3. Sports Team Ownership

1. Gaming

Around the late 80s / early 90s, Israel’s military was at the forefront of pioneering modern-day data science. Functions like signals intelligence required handling complicated datasets and extracting actionable insights. So the military trained hordes of young Israelis. Meanwhile, universities like the Technion became research hubs.

By the mid 2000s, Israel had a critical mass of talent that understood data science – and started applying their expertise to digital marketing. Think early Google and Facebook ads. Israel was never a hub for consumer goods (e.g. appliances or apparel); market size and geography made these businesses tougher. But mobile gaming was one industry where 1) distribution was fully digital, and 2) success hinged on performance marketing expertise. Essentially, the only metric that matters in gaming is the CAC-LTV ratio. Data science can help optimize that. So Israel’s human capital flowed towards gaming businesses.

By 2006, two B2B betting startups, 888 Holdings and Playtech both had major exits around $1B. Those two companies gave rise to talent pools and more massive gaming outcomes in the last twenty years.

We’ve seen more B2B tools for gaming companies emerge. SBTech, which provides a suite of tools for betting operators, merged with DraftKings as part of their SPAC at a $656M valuation in 2020. Or a much larger outcome: ironSource, which provides a UA & monetization engine for mobile game developers, went public at $11B in 2021 and was ultimately acquired by Unity in 2022.

We’ve also seen multiple successful B2C gaming operators, largely around social casino and hypercasual games. For example, Playtika and Moon Active are both developers / publishers last valued at $1.8B and $5B, respectively. (I’d caveat that Playtika IPO’d at $11.1B back in 2021, and Moon Active’s mark is from 2021).

Looking forward… For social casino and hypercasual games, growth has slowed since their 2018-2022 boom. But AI can drastically cheapen content development and boost monetization efficiency, so new developers can differentiate there. Skills-based games, which blend casual gameplay with real-money mechanics, are another niche to track. Israel’s produced the category’s top incumbent Papaya Gaming and emergents like Bring It On.

Lastly, as sports betting and iCasino industries develop in the US and other markets, there’s whitespace for new B2C operators who can do user acquisition & monetization more efficiently or target legal niches, and B2B companies that provide these tools to existing operators. One interesting B2C startup is Geckos Games, a senior team from 888 Holdings that launched Thrillzz, a sweepstakes sportsbook (a la Fliff) targeting American bettors.

Here are two articles I recently wrote about whitespaces in real-money gaming and video games.

2. Media Production

Another consumer tech niche where Israel has produced disproportionate winners is media production.

Similar to gaming, this sector grew out of the military. Israel’s military has historically been at the forefront of computer vision, the AI subsector that helps interpret real-world images and video. Computer vision’s critical to reconnaissance, missile detection and other military functions.

In the 2010s, Israeli founders started applying what they learned in the military to commercial sectors. For example, Gal Oz spent nine years in the military working on drone computer vision before cofounding Pixellot, which uses computer vision to automatically track and produce streams of sports events. Pixellot, last valued at $500M is a category leader in amateur sports video production. Another interesting B2B company is WSC Sports, last valued at $695M, which helps leagues like the NBA automatically clip highlights.

But computer vision’s applications aren’t limited to B2B. Lightricks, last valued at $1.8B, specializes in consumer-facing AI-powered photo and video editing tools. Their most popular app Facetune is wildly popular for retouching Instagram photos.

In terms of what’s next, I’d highlight a few niches of media production. Microdrama apps – i.e. short-form, vertical video apps (think Quibi 2.0) – are growing rapidly in the US and Europe; multiple Israeli teams are building in this space. Drone cinematography is another space to watch; the military’s deep expertise around drones could give Israeli founders a real edge in automating and cheapening high-quality content capture. Lastly, as AI models upend image and video production pipelines, I could see Israeli startups succeeding around data labeling infrastructure, B2B AI media production tools, and even B2C AI-powered content studios.

3. Team Ownership

This last category – pro sports team ownership – is less relevant for early-stage investors. But I think the asset class has room for growth in Israel.

Across Europe, pro teams are increasingly seen as financial assets. As of 2023, over one third of clubs in Europe’s “Big Five” soccer leagues had some form of private capital ownership. But Israeli clubs haven’t seen the same influx of capital. I’d attribute that to two reasons: 1) Israeli clubs have smaller fanbases and businesses than top European clubs, and 2) more investors are probably hesitant to invest in fixed assets in Israel given geopolitical concerns.

That said, Israel’s sports ecosystem looks a lot like those of European countries. Israel’s top two soccer divisions drove ~$220M in revenue in the 2022-23 season. That’s roughly the size of a second- or third-tier league in a Big 5 market, or the top division of a smaller market like Poland. In terms of competition, multiple clubs have qualified for the Champions League group stage in the past (most recently Maccabi Haifa in 2023). Plenty of European clubs similar in size to Israel’s have raised private capital.

Israeli basketball teams are also appealing assets. Maccabi Tel Aviv is a mainstay of the Euroleague, and Hapoel Tel Aviv qualified for the Euroleague this year. Some Israeli teams have tried expanding their fanbases by playing preseason games against NBA teams. Israeli basketball could get even more interesting as the NBA launches a new European league and commercializes the ecosystem better.

Professionalized and sports-savvy family offices could be acquirers. For example, in 2023 the Adelson family, which owns the Dallas Mavericks, bought a 90% stake in the Hapoel Jerusalem basketball team. There are many international Jews who give philanthropically to Israel; for example Patriot owner Bob Kraft has funded the amateur Israel Football League and a major sports complex in Jerusalem. And these Jews could be interested in owning a trophy sports asset in Israel. Israel also continues to produce more billionaires capable of buying a team, from the shipping mogul Idan Ofer (who owns a 33% stake in Atlético Madrid and a majority stake in Portugal’s Famalicao) to the four Wiz founders (who are each taking home $2B post-acquisition).

I think we’ll also see PE firms buy stakes in Israeli teams over the next decade. We might not see megafunds like CVC and Silver Lake enter the market. But plenty of smaller PE firms that backed second- and third-division European clubs could look to buy an Israeli soccer or basketball team. PE-backed ownership groups could inject capital into these clubs to fund more expensive rosters to compete on the European stage; stadium renovations to improve the fan engagement experience; better management teams to optimize the business, and more.

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Gaming, media production and team ownership are just a sampling of the investment opportunities around Israeli sports, entertainment and consumer.

If you’re operating, investing or starting a company in Israel around any of these spaces or adjacent ones, please reach out. The Will Ventures team would love to meet you.