Israel’s booming hi-tech industry is causing a stir due to the anticipated judicial reforms. Tom Livne, the founder of one of Israel’s most well-known software unicorns, announced Tuesday that he was relocating and stopping to pay taxes in opposition to the reforms.
In its most recent fundraising round in late 2022, Livne’s hybrid AI-based and human transcription and captioning software business, Verbit, was valued at $2 billion.
Still, the 37-year-old technology executive told Channel 12 he encouraged more well-known tech CEOs to follow his route.
“Over the past few years, I’ve paid tens of millions in taxes, and my firm has paid hundreds of millions in taxes,” he stated. When the “tech sector, the motor that pushes the economy,” as Livne put it, “talks like this, they’ll come to the table and talk to us as equals,” he continued.
According to Livne, the right-wing government’s aggressive measures will be “mostly affected” by his proposal.
Many big corporations, including CNBC, CNN, Fox, and Harvard and Stanford colleges, use Verbit’s transcription services.
Verbit has 200 employees in Israel and closes to 1000 internationally.
Livne was addressed by Finance Minister Smotrich, who expressed his desire for his return.
We don’t have another place, another people, or another nation, Smotrich wrote in a tweet. In any case, we pledge to uphold Israel’s Jewishness, democracy, strength, and economic prosperity with God’s assistance, ensuring that you and every Jew will always have a place to call home.
Despite its high valuation, Livne’s company scarcely exemplifies the success of Israeli high-tech firms.
Despite generating $100 million in revenue annually, the company has been unable to produce significant profits. Last summer, Livne was forced to fire 60 employees, including tens in Israel, to become profitable.
In the wake of the proposed court reforms, Livne’s exit comes shortly after that of another digital unicorn, Papaya, whose founder Eynat Guez declared last week that she was “withdrawing all of the company’s finances from Israel.”
Guez called this a “painful but necessary business step.” Guez, Livne, and other high-tech entrepreneurs are worried that the new environment will discourage foreign investments, which are essential to expanding their businesses.
בלעדי: תום ליבנה, מייסד היוניקורן וורביט ששווה 2 מיליארד דולר מצהיר – יורד מהארץ ומפסיק לשלם מסים pic.twitter.com/DSRbDyPlSI
— עמליה דואק (@AmalyaDuek) January 31, 2023