Israeli entrepreneur and investor Erel Margalit explores Bahrain’s fintech sector
Margalit is the first Israeli businessman to meet with Bahrain’s finance minister since signing of the Abraham Accords
This article was first published in Jewish Insider.
With an eye to Riyadh, Israeli entrepreneur and investor Erel Margalit spent four days in Bahrain last week exploring the Gulf state’s advances and aspirations in the world of financial technology, or fintech, as well as assessing the possibility of opening one of his innovation centers in the country. He believes that such developments could form a tech bridge to Bahrain’s neighbor, Saudi Arabia, which Israel has long been hoping will be the next country to join the Abraham Accords normalization agreements.
“I was surprised by the level of entrepreneurship in Bahrain; those regulating the country are using ideas and concepts like a startup,” Margalit, founder and executive chairman of Jerusalem Venture Partners (JVP) – one of Israel’s oldest and most established venture capital companies – told Jewish Insider in an exclusive interview on Saturday.
“They are able and modest and ready to hear new ideas,” he said of Bahraini officials and counterparts that he met with. “They want to hear about what we are doing in Israel and there is a real eagerness to cooperate with us.”
Margalit, who served as a member of Knesset for the Labor party from 2015-2017, was invited by the Bahraini government and the country’s Economic Development Board. He was also a special guest of the country’s finance and national economy minister, H. E. Shaikh Salman bin Khalifa Al Khalifa.
The first Israeli businessman to meet with the minister since the signing of the Abraham Accords in September 2020, Margalit also held discussions with economic-business leaders, including the heads of Bahrain’s major banks – the National Bank of Bahrain and ila Bank – various investment funds, communications and energy companies, and heads of leading universities, as well as leaders in the innovation industry and dozens of technology and social entrepreneurs.
Much of the discussions, Margalit told JI, focused on how to develop the country’s fintech industry, which draws innovators and investors from across the Arab world. It’s a fine fit for many Israeli companies already working in this now-growing tech field, he added.
“Fintech is about allowing financial services to reach people who don’t always have access to them,” the entrepreneur explained. “Bringing financial services to small businesses in different countries is touching, and it is a path that builds goodwill and removes barriers.”
But boosting the fintech industry in Bahrain, which is strategically located in the Persian Gulf just off the coast of Saudi Arabia, could also be a highly beneficial step for Israel, where there is hope that the Saudis may be the next Arab nation to normalize ties with the Jewish state.
“Bahrain is a bridge to Saudi Arabia, and we all realize that this might be Israel’s next big step in the Arab world,” Margalit said. “For Israel, Bahrain can serve as a gateway to a much larger chapter that will make a big difference to Israel’s economy and its diplomacy.”
Margalit said that Al Khalifa took a special interest in his Startup City model, which connects prominent tech and business players with social and cultural entrepreneurs. Margalit first developed the concept about 15 years ago in Jerusalem and has since created four more hubs, each focused on a specific aspect of the innovation and technology ecosystem, including cyber, food tech and health tech.
“They heard about what we are doing in New York [Margalit opened a hub in Soho in June 2021], Haifa, the Galilee, Jerusalem and Beersheba and invited us to have an open conversation about how Israel and Bahrain can cooperate,” Margalit said, adding he was “honored to answer the invitation of the Bahraini government to open a new economic chapter between the two countries based on high-tech and entrepreneurship.”
Israel’s ambassador to Bahrain, Eitan Na’eh, who accompanied Margalit at the meetings, called the visit a “milestone in the relations between the business sectors of the two countries.”
“Erel’s Startup City model, which was presented to senior Bahraini officials, complements our joint vision of building a tech corridor between the two countries,” Na’eh said. “Israel sees Bahrain as the gateway to the Gulf.”