Startup Nation CFOs discuss the impact of war on Israeli high-tech

As Israel approaches the solemn 11-month mark of the war with Hamas, Startup Nation has joined the entire country in a battle for survival under extreme circumstances. The war with Gaza has not just hurt Israel emotionally, but the ongoing challenge of war has had a substantial and long-lasting impact on its economy.

Startup Nation typically accounts for more than a third of the country’s income tax, meaning the health and longevity of its companies are paramount for Israel’s economic survival. Therefore, the CFO is often regarded as an essential - although sometimes overlooked - role in how these companies help society as a whole.

Overwolf’s Moran Izhaki, Artlist’s Noa Zabar, and Bits Of Gold’s Omri Donyo

CTech spoke to three CFOs in different sectors across Startup Nation to better understand how their companies navigated the first year of the war with Hamas.

What role does the CFO play at your organization and when did you join the company?

“I steer the legal and financial operations of the company, including financial planning and analysis, budgeting, tax, treasury, accounting, investor relations, and risk management,” explained Overwolf CFO Moran Izhaki. She joined the software platform for in-game creators in December 2023 and has already adopted the nickname ‘Queen of Coin’ by CMO Shahar Sorek. “My role also involves strategic decision-making, working closely with the CEO, the executive team, and board members to ensure our financial strategies align with the company’s vision and goals.”

“I joined the company four years ago when it was still in its early stages,” added Noa Zabar, CFO of royalty-free music platform Artlist. “My role as CFO involves building a robust infrastructure and establishing key performance indicators (KPIs), which are crucial in helping the company plan strategically and making informed decisions.”

Omri Donyo officially joined Bits Of Gold, the largest Bitcoin and Ethereum broker in Israel, in 2021 after working as an external consultant since 2017. “My work involves direct management of the finance departments and financial operations,” he explains. “Among other responsibilities, I handle classic accounting tasks such as preparing financial reports, comparing budget versus actual performance, managing cash flow, and collaborating closely with the CEO and management on business development. Additionally, I oversee operations and manage the company's service infrastructure.”

How did October 7 change your company, and what are some of the ways it navigated that period?

“We are a multinational company with around 130 employees based in our Israel headquarters,” said Izhaki. “The events of October 7, 2023, had a significant impact, particularly due to the uncertainty created. To navigate through this period, we focused on four key areas: Safety and Support, Agility and Flexibility, Clear Communication, and Risk Management.” This meant the company implemented support initiatives to help employees navigate the challenging period such as mental health resources, enhancing remote work capabilities, and offering regular updates about the company’s status and future plans.

Additionally, Overwolf strengthened its risk management frameworks ensuring that it could anticipate and mitigate potential risks effectively. This included focusing on the safety of its employees and ensuring robust contingency plans were in place, among other things.

For Artlist, there was not a direct impact on its business operations after October 7, but Zabar acknowledges that it had a “significant” impact on morale. “To navigate this period, we focused on supporting our employees through open communication, providing resources for mental well-being, and fostering a sense of unity and resilience within the company,” she explained.

Bits Of Gold acknowledged that for the company, alongside all Israelis, the events of October 7 were challenging both psychologically and in terms of employee coping. It had staff members traumatized by the events and those who were mobilized for extended reserve duty. This led to significant staff shortages in its service department comprised of young employees.

“We supported our staff both mentally and by providing the necessary equipment,” remembers Donyo. “During the early days of the war, we launched a donation campaign for residents in the south, raising hundreds of thousands of shekels in digital currencies to support rescue teams operating in the southern region.” The Crypto Aid Israel project received donations in over 12 digital currencies, including Bitcoin, Ether, USDT, and more.

“Using the technological tools available at Bits Of Gold, we set up infrastructure to convert cryptocurrencies back to fiat currency, enabling quick delivery of funds and maximizing fundraising efforts. These remain complex times of war, and we all pray for the safe return of the hostages and soldiers,” he added.

How do you balance the role's requirements with the CEO's demands or investors' expectations?

According to Izhaki, Overwolf built a culture of trust where the board and its investors respect the company’s autonomy in managing day-to-day operations while remaining fully accountable and aligned with their expectations. “Our strategic approach involves regular, transparent discussions with our board and our investors. We ensure that every critical decision is well-informed and aligned with our company’s long-term vision. This collaborative environment allows us to address potential concerns proactively and leverage the diverse expertise of our board members. This balance allows us to navigate complex challenges effectively and drive sustainable growth for the company,” she explained.

For Artlist’s Zabar, balancing the requirements of the role with the demands of the CEO and the expectations of investors involves a strategic approach. “I focus on translating these demands into comprehensive financial models that assess both short- and long-term impacts,” she said. “This enables us to weigh the benefits and risks of each decision more effectively. By mapping out potential outcomes, I provide data-driven insights that align with the company’s goals and meet stakeholder expectations.” She adds that this approach not only ensures informed decision-making but also fosters trust and transparency with the CEO and investors.

Bits Of Gold’s Donyo believes the key is understanding the company's strategic objectives as articulated by the management team, of which he is a part, and then translating those into regular, actionable plans. “I meet with the CEO for a weekly sync-up, regularly updating him on the company's performance,” he explains. “This also happens in bi-weekly management meetings and a monthly status meeting. This approach allows me to balance the pressing demands of the company with those of management, ensuring continuous financial stability and long-term growth.”

How has the current economic climate in Israel affected your financial strategy?

“As Overwolf’s core business is in the gaming industry, it has been known to be remarkably resilient, even during times of war, economic crises, and other major disruptions,” said Izhaki. This resilience also stems from the company’s diversified revenue streams, global market reach, and multinational teams.”

Zabar said it has not directly affected Artlist’s financial strategy and it remains vigilant and continuously monitors economic trends. “Our approach is to stay adaptable and prepared for potential changes. We maintain a robust financial strategy with built-in flexibility to adjust to shifting conditions, ensuring we are well-positioned to navigate any future economic developments,” she said.

Bits Of Gold has added more currencies, offered secure custodial services, deposited currencies from private wallets and foreign exchanges, and offered its Connect service, where companies and financial institutions can offer services to their customers using its existing crypto infrastructure. An example of this was its collaboration with credit company MAX to create a credit card that accumulated Bitcoin, and with the car importer Colmobil to allow car purchases with the cryptocurrency. “These initiatives expand our product portfolio, providing additional income sources beyond our current activities, and enabling growth and entry into new markets. At the same time, we continue investing in the development of new products and geographical expansion.”

How do you balance the need for rapid growth with financial stability?

“Balancing the need for growth using the company's cash reserves while maintaining financial stability involves a combination of data-driven selective strategic planning, clearly defined prioritization, financial modeling, and continuous monitoring,” answered Overwolf’s Izhaki.

Artlist focuses on sustainable growth by setting clear, achievable milestones and closely monitoring its financial health. “By maintaining strict financial controls and leveraging data-driven decision-making, we can manage growth effectively. Regular reviews of our growth strategies and financial performance help us stay agile and make adjustments as needed to maintain a healthy balance,” Zabar said.

Donyo says that balancing rapid growth with financial stability is akin to a juggling act, especially in the digital currency sector. He adds that this is evident from the cycles observed in the crypto world every few years. “While aspiring for growth and product development to serve our customers in the next bull run, we aim to maintain financial stability and ensure sufficient cash reserves for times of crisis,” he said, highlighting the company’s 11-year-old age. “Throughout these years, we've maintained financial stability even during industry crises when major exchanges worldwide collapsed.”

Can you share a significant financial decision you’ve made that had a major impact on the company’s trajectory?

“Being part of the strategic group that decided to acquire Nitro \[in May 2024\] was a pivotal moment in reshaping our company’s trajectory in the ad tech space within gaming,” concluded Izhaki. “The acquisition was a key element of our long-term vision, and I had the privilege of stepping into my role right as this major project was underway, becoming an integral part of the decision-making team.”

Zabar shared that she impacted the company’s trajectory by optimizing marketing investments and strategically managing hiring through the implementation of key performance indicators (KPIs) and analytical models. “By prioritizing efficiency, we successfully reduced costs, enhanced productivity, and achieved sustained growth, which led to positive EBITDA and free cash flow,” she concluded.

Donyo concluded by sharing that his role primarily involves budget management and deciding when to cut budgets and whether to let go of staff. “Conversely, it also requires knowing when to increase the budget, whether for marketing efforts or developing new products,” he said.