The Israel Advanced Technology Industries (IATI), an umbrella organization of high-tech and life sciences firms, is partnering with a fintech (financial tech) hub in Bahrain to develop joint initiatives and support the fintech industry in both countries and regionally.
According to the new cooperation agreement, announced on Tuesday, IATI and Manama-based Bahrain FinTech Bay will work together to facilitate introductions and communications between startups, companies, and venture capital firms seeking investments and expansion in both countries.
Israel and Bahrain normalized ties in 2020 as part of the US-brokered Abraham Accords, which also established diplomatic relations between the Jewish state and the United Arab Emirates. The accord paved the way for normalization with Morocco months later.
Bahrain and Israel have been working to strengthen bilateral ties. In February, Israel signed a tech and science cooperation deal with Bahrain, although details were scarce, followed by an agreement to cooperate on health and medical innovations, and medical research.
The two countries are believed to have maintained covert ties on security and defense over the years.
The new fintech agreement was signed on Tuesday in Tel Aviv with senior officials from the Bahrain fintech industry and leaders from the Israeli fintech ecosystem. They were joined at the event by Bahraini Ambassador to Israel Khaled Yousif al-Jalahma, former Mossad chief Yossi Cohen, who now heads SoftBank’s Israel operations, and IATI CEO and President Karin Mayer Rubinstein.
Rubinstein said the deal marked “a significant step for Israeli fintech companies” and a “wonderful opportunity for the Israeli industry to develop new connections and collaborations that were not possible until now.”
“Bahrain FinTech Bay is among the leading fintech organizations in the Middle East and, together, I believe that we will be able to create quality and groundbreaking collaborations between the countries,” she added in a press statement.
Bahrain FinTech Bay bills itself as the “largest fintech hub” in the Middle East, and serves as an incubator, accelerator, innovation lab, and co-working space for startups and companies looking to integrate technologies such as artificial intelligence, cloud computing, and big data into the financial services industry.
The Gulf country is an important financial center, once the most prominent in the region before being overtaken by the UAE. It is home to some 400 licensed financial institutions and about 120 fintech startups, according to a 2022 report by Bahrain FinTech Bay.
Bader Sater, CEO of Bahrain FinTech Bay, said the country “has taken enormous steps to adopt and promote innovative technologies and we are pleased to launch this partnership to enable further development of the fintech industry in Bahrain and to devise new opportunities for the Bahraini fintech industry and our partners at IATI.”
“This exciting step towards cross-border collaboration with the Israeli fintech industry will pave the path to future partnerships and will strengthen the ecosystems in both countries,” said Sater.
Israel boasts over 500 fintech companies, according to the Start-Up Nation Finder database. The local fintech sector enjoyed a funding boom in 2021 (like all other sectors) with investments in fintech startups and companies reaching $4.5 billion over the course of the year, according to a March report by Israeli investment firm Viola Group.
Amid a market downturn in 2022, Israeli fintech companies raised about $1.5 billion in the first half of this year, according to the latest IVC Israeli Tech Review report for H1 2022 put together by research center IVC and LeumiTech.