Middle East Diplomacy Could Help Fix Online Travel Blindspot

Online Travel This Week

Israel’s travel tech startups have long been a pipeline for large online travel players ranging from Google to Yahoo and Booking.com, but Israeli Arabs and Palestinians on the West Bank and Gaza have largely been out of the investment and acquisition loop.

Consider some of the Israel-involved merger and acquisition deals over the years. Yahoo bought metasearcher FareChase for $20 million in 2004, Google acquired community-based navigation app Waze for $1.2 billion in 2013, and Booking Holdings purchased ad-tech firm Qlika for $15-$20 million in 2014. All of the targeted companies grew up in Israel; there have been many more such merger deals and venture investments along the way.

Business travel platform TripActions, founded by Israelis, has attracted $1.1 billion in investments and financing. Tel Aviv-based Guesty, a short-term rental platform, drew some $64 million in funding, and Gett, a ridehailing solution that’s likewise based in that city, generated $928 million in investments.

Many travel startups, if not headquartered in Israel, have had tech teams based in that country, which has long been considered a technology hotbed.

But if major online travel players have offices in Israel or have toured that conflicted country to scout for travel tech startups, there hasn’t been much action on their part regarding the Israeli Arab side of the equation.

But that is changing, thanks to Israel’s controversial peace deals with the United Arab Emirates and Bahrain.

Israeli Arab tech entrepreneurs, who the Washington Post described as being “long sidelined,” are hopeful that funding will start flowing in from the United Arab Emirates and other Middle Eastern countries and investors.

“Over the past two decades, Arab Israelis have watched from the sidelines as their Jewish neighbors translated military experience into multibillion-dollar start-ups, especially in areas like cybersecurity, and Israel became home to the highest per-capita concentration of start-ups in the world, according to Startup Genome, a San Francisco-based research group,” the Washington Post story said. “Arab Israelis hope Emirati finance can get them in the game.”

In another signal, Etihad Airways, a flag carrier of the United Arab Emirates, recently joined Booking.com and Amadeus to partner with Rehovot, Israel-based venture firm Arieli Capital to launch an accelerator program for travel tech startups. The program will accept startup applicants from Israel and elsewhere.

It would be easy to envision Etihad partnering with, or eventually acquiring, a startup or two from this field, including entries from Israeli Arab founders.

While online travel and transportation services have partnered with West Bank startups on translation services, it would be great to see investment flowing toward Palestinian travel-tech entrepreneurs in the occupied territories, as well.

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