Tal Barnoach’s Disruptive and Disruptive AI venture capital funds informed their investors this morning of their intention to withdraw the funds from Israel and transfer them abroad. The funds, which manage a total of $250 million, are joining the announcement made by Einat Guez of Papaya Global, who stated that the company will also withdraw its funds from Israel due to the proposed legal revolution. Barnoach has previously invested in companies such as Ironsource, Anodot, Taylor Brands, and others.
Barnoch said that the proposed reform is a legal coup and that if it goes through, it will lead to economic instability in Israel as one authority will have the power to make arbitrary changes to taxation and the way companies operate. He emphasized that an economy needs stability, and mentioned that during a meeting with investors in London, they expressed concern that if the reform passes, they may have to rethink their investments in Israel and that they do not want to be at the mercy of one authority.
A decision by high-tech companies to withdraw their cash balances from banks in Israel could have an impact on both the Shekel and the Israeli banks, if there is a large amount of money withdrawn in a short period of time. A company like Papaya typically spreads its cash balances across the countries where it has offices, but most of it is held in Israeli banks. Papaya has 600 employees worldwide. The company, founded in 2016, develops a system for the global management of employees, wages, and benefits – whether they are direct employees, outsourcing employees, subcontractors or global employees employed by employment companies on behalf of the parent companies. The company’s system already handles employees in more than 140 countries around the world