Israeli investor and entrepreneur Erel Margalit spent four days in Bahrain last week after receiving an invitation from Bahrain finance minister HE Shaikh Salman bin Khalifa Al Khalifa to come and discuss innovation, tech, and joint cooperation between Israel and Bahrain.
Margalit, the founder and chairman of global VC Jerusalem Venture Partners (JVP) and founder of the Margalit Startup City centers, became the first senior Israeli businessman to have an official meeting with the country’s finance minister since the signing of the Abraham Accords in September 2020.
“It’s a big deal,” he tells NoCamels in a phone interview on the way to an event at Margalit Startup City Galil, the international food tech center he launched in fall 2021 in Kiryat Shmona. “Technology and innovation are becoming the number one bridge for Israel in the region for diplomacy.”
While fintech was the focus, Margalit also discussed cybersecurity, food tech, and media technologies as an official guest of the Bahrain Economic Development Board (EDB), the Bahrain Government’s economic arm. He was accompanied by JVP partners Yoav Tzruya and Shimrit Koenig.
On the government and federal levels, Bahrain is very advanced in fintech, Margalit explains. “So one of the big ideas was ‘Well, if you’re very advanced in fintech in the way you run your country, why don’t you become advanced in fintech in terms of your startups?’ he says, “That’s where Israel can help.”
According to Margalit, encouraging the advancement of Bahrain’s fintech sector – as Israel has already done in the United Arab Emirates – also offers a “gateway to the Gulf.”
“Bahrain is connected with a bridge to Saudia Arabia. So why don’t we add Saudi Arabia to the equation, so it’s Saudi Arabia, Israel, and Bahrain,” Or more specifically, Riyadh, Tel Aviv, and Manama. He referred to these cities as a “fintech triangle.”
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Margalit says that while Saudi Arabia and Israel have not yet come together politically, on a business level “we should build it now as a connection that we make together. Because we met quite a few Saudis because they crossed the bridge. And we saw that there was a huge interest,” he continues, “The technology community has already set a framework that includes the next step politically in the business plan that we’re putting on the table now.”
The visit was accompanied by Eitan Na’eh, Israel’s ambassador to Bahrain. He called the visit to Bahrain “a milestone in the relations between the business sectors in the two countries.”
“Erel’s Startup City Model which was presented to senior Bahraini officials complements our joint visions of building a tech corridor between the two countries. Israel sees Bahrain as the gateway to the Gulf,” he said.
Margalit has already established four Startup City innovation centers in New York, Beersheba, Jerusalem, and the Galil dealing with verticals such as cybersecurity and food tech. He is also in talks to build centers in Paris and Dubai and says Bahrain officials, like Al Khalifa, were interested in the model.
“They want to create a bridge between the two ecosystems that would identify the leadership that Bahrain can take in coordination with Israel. And so when we ask these questions…we always ask, what is it that you can do that you could be a leader in five to seven years and create 30 to 50,000 high paying jobs?” Margalit explains, “And so that’s what we were asking them as well, what is it that you can do in Manama that can be connected to Israel, that can be a center of excellence that the world will notice.”
In the meeting, which was held at the aptly named ‘Diwan Hub’ in Manama, dozens of Bahraini entrepreneurs took part. They came from fields such as the media and solar energy, and from cyber to blockchain. Social entrepreneurs and peace activists who took part in the meeting expressed their great desire to cooperate further with Israel and to create long-lasting connections between the two countries’ innovation communities, as the key to creating a new story for the region as a whole.
Margalit also met with the country’s economic-business leaders, including the heads of Bahrain’s banks, investment funds and energy companies. In the fintech realm, they talked about blockchain and providing security for cross-border payments, in the world beyond SWIFT, the global provider for secure financial messaging services.
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