In recent years, Jerusalem has emerged as Israel’s undisputed leader in biotechnology. Long known for its role in government, religion, and tourism, the capital has undergone a quiet but profound transformation. Today, Jerusalem is not only the seat of national decision-making – it is also a dynamic center for scientific discovery and healthcare innovation.
The numbers tell a compelling story. Jerusalem is home to approximately 550 hi-tech companies, including around 470 startups. Remarkably, nearly 44% of these are active in the life sciences – more than in any other region of the country.
This transformation is no accident. It is the outcome of long-term strategic policy, targeted public investment, and a thriving academic ecosystem.
Government initiatives such as BioJerusalem – led by the Jerusalem Development Authority – offer start-ups in the sector financial incentives, including grants of up to NIS 4 million ($1.1m), tax benefits, and access to top-tier academic and infrastructure support. These efforts are amplified by a pipeline of talent: more than 1,800 students graduate each year with life sciences degrees from the Hebrew University and other local institutions, feeding directly into the city’s growing innovation ecosystem.
Innovation in Jerusalem
Jerusalem also hosts some of the country’s most important life sciences hubs. The Jerusalem BioPark, for example, is located on the Hadassah Ein Kerem campus, adjacent to the university hospital and medical school.
More recently, SHAAR – a new center for medical innovation – was launched at Shaare Zedek Medical Center in collaboration with the Arieli Group and the Jerusalem Development Authority. SHAAR’s inaugural program, launched in early 2024, supports Israeli and international start-ups from seed to Series A, with a focus on AI-driven medical devices and personalized medicine.
Biotech, by its nature, demands patient capital. Unlike cyber or SaaS ventures that can reach proof of concept relatively quickly, biotech start-ups often face longer development cycles and high regulatory hurdles. These barriers deter many traditional VCs and explain why biotech still accounts for a relatively modest share of Israel’s overall hi-tech investment. In 2024, life sciences companies in Israel raised approximately $2 billion – $1.2 billion of it from foreign investors, and just $800 million from Israeli sources.
Human case for investing in biotech
Yet the case for investing in biotech is not only financial – it is profoundly human. These are the companies developing next-generation treatments for cancer, neurodegenerative diseases, genetic disorders, and global pandemics. Breakthroughs in these fields have the power to extend and save lives on a massive scale, bringing new life into this world and increasing human longevity.
With continued investment and support for early-stage ventures, the city is well positioned to remain Israel’s biotech capital for decades to come. Jerusalem stands not only at the intersection of policy and research, but also at the forefront of clinical excellence. The future of medicine may very well begin here.
The writer is a co-founder and managing partner of Arieli Group.