Einat Guez, founder and CEO of Papaya Global, earlier this week sent a warning letter to investor Dovi Frances, founder and CEO of the venture capital fund Group 11, threatening to file a defamation lawsuit, Calcalist reported. She demands a public apology and clarification from Frances following his public claim that she endangered the company’s funds by transferring them to SVB, the Silicon Valley bank that collapsed shortly afterward.
The warning letter also promises that all the money the court would force Frances to pay up would be donated to the protest against the “judicial coup d’état” and the “fight to preserve democracy.”
Frances has not responded publicly to the news about the lawsuit.
דובי פרנסס כריש אמיתי
עכשיו בערוץ 12 מראה לכולנו מהו אומץ לשחות נגד הזרם המוטרף ושטוף השנאה של השמאל pic.twitter.com/gzCev5HbsE
— Moshe Edri (@Moshedri) April 22, 2023
Here is a fun fact: Back in January, when Frances attacked Guez over her decision to move her company’s money from Israeli banks to the US, she tweeted: “Papaya has over 30 investors and 3 board members, and none of them are named Dovi Frances.”
Silicon Valley Bank (SVB) was a state-chartered commercial bank headquartered in Santa Clara, California, that offered services specifically designed to meet the needs of the hi-tech industry, and became the largest bank by deposits in Silicon Valley and the preferred bank of almost half of all venture-backed tech startups. In March 2023, there was a bank run on its deposits, which led to its collapse on March 10, 2023.
In January, Eynat Guez announced that Papaya Global was withdrawing all its funds from Israeli banks in response to the reform, explaining: “This is a painful but necessary business step.” She tweeted: “Following Prime Minister Netanyahu’s statements that he is determined to pass reforms that will harm democracy and the economy, we made a business decision at Papaya Global to withdraw all of the company’s funds from Israel.”
In other words, Guez and many other Israeli hi-techs created a self-fulfilling prophecy loop whereby they issued warnings about how the judicial reform would ruin the economy, and they, then, went about trying the ruin the economy.
SVB had an Israeli branch, managed by David Cohen and Gadi Moshe, which served an estimated 500 Israeli companies, including giants such as eToro, Redis, Verbit, Fireblocks, and Capitolis. According to reports, companies that tried to take their money out of SVB were refused. According to Bizportal, several Israeli hi-tech companies that wanted to protest the Israeli government’s judicial reform legislation took their money out of Israeli banks in February and moved it to… SVB. Oh, and there was this: SVB CEO Greg Becker said at the time: “I ask everyone to relax and support us as we supported you in difficult times.”
But while Israel’s wealthy hi-tech Barons tried and failed to ruin Israel’s economy, shooting themselves in the foot in the process, Israel did not abandon its treasonous hi-tech Barons, mainly to help save thousands of jobs in the country’s most lucrative industry. On March 12, Prime Minister Benjamin Netanyahu issued a calming statement saying: “I held talks with Israeli hi-tech seniors. When I return to Israel (he was in Rome at the time), I will discuss with the ministers of finance and the economy, and the governor of the Bank of Israel the extent of the crisis. If necessary, out of responsibility for hi-tech companies and employees, we will take steps to help the Israeli companies.”
So, what happened to Eynat Guez? On March 11, she tweeted: “Discount Bank and Bank Hapoalim are taking amazing steps in supporting Israeli companies – immediate loans to companies alongside bridging loans to employees whose wages will be delayed by companies due to the collapse of SVB. This is what real leadership looks like. Thank you for the example and the lead!”
Yes, nice banks, the same banks Guez was bravely predicting “they will collapse” because it was “my right and even my duty” to ruin them and Israel’s economy.
Naturally, she expressed no gratitude to Netanyahu, without whose pressure and support those “amazing” banks would not have rescued her from the pit into which she had jumped together with her investors’ shekels.
Finance Minister Bezalel Smotrich, one of the right-wing leaders most demonized by the anti-reform protesters, put together a team, led by the Finance Ministry’s Director-General Shlomi Heizler, with representatives of the Finance Ministry, the Bank of Israel, the Securities Authority and the Innovation Authority. The team was in contact with the hi-tech industry, funds, and financial institutions in Israel and the US, to analyze the SVB collapse’s impact on the Israeli economy and formulate a response to Israeli companies’ urgent needs.
Of course, neither Netanyahu nor Smotrich helped Guez and many other privileged Barons out of the goodness of their heart, but only to save thousands of jobs belonging to the masses who congregate by the thousands several times a week demanding their heads.
