Meta’s $16.7 billion fine is a win for this Israeli VC thesis - #0099, Oren Charnoff

For two decades, the winning formula in consumer tech was simple: maximize time on screen. Last month that formula got a multibillion-dollar price tag attached to it when Meta agreed to pay roughly $17 billion to settle a multistate lawsuit alleging Facebook and Instagram were deliberately engineered to be addictive to teenagers. Now, one Israeli investor thinks the backlash could create an opening for a very different kind of consumer product, and for a new generation of Israeli founders. Oren Charnoff is the Co-founder and a General Partner at Sticker Ventures, a Tel Aviv early-stage fund that invests exclusively in Israeli B2C startups. He sees the settlement as validation of a thesis his fund was already investing behind, based on changing consumer habits among young people. “We want to find more companies whose goal is not to increase time spent on the app,” he said. “We hope to see more ‘IRL’ things being built by Israelis.” He points to two U.S. examples he admires. The first, Tin Can, is a landline-style phone that plugs into the wall, paired with an app that lets parents approve who their kids can call; Charnoff says it’s doing roughly $80 million in annualized revenue. The second is Board, a digital game console built entirely around in-person play. “The only way that you can interact with it is with another person with you,” he said. Closer to Sticker’s own market, Charnoff cites Edikted, the Israeli-founded Gen Z fashion label, which The Wall Street Journal recently reported as achieving roughly $460 million in revenue: “They crush it on retail. They crush it for offline discovery.” Startup Nation’s advantage in the changing market The shift makes it perfect timing for Israel’s tech DNA to tap into adapting markets. Startup Nation has accumulated decades of expertise in adtech, gaming, fintech and cybersecurity, producing a generation of founders trained to measure, test and optimize. Add to that a new type of internet-native, young immigrant to Israel who is a product of globalization, and those skills can be unleashed on the world’s biggest GDP category: consumers. “The same quants who do anomaly detection in cyber can optimize the budget, channel and yield of consumer growth,” Charnoff said. He traces the lineage directly to Israel’s earlier tech waves. “Adtech is one of the founding mothers and fathers of B2C,” he said, pointing to the exodus of former ironSource employees now building consumer companies of their own. The craving to steer away from online apps and toward “In Real Life” extends into dating apps, both in his portfolio’s orbit and out of it. Companies are moving away from “unlimited swipes whose goal is to maximize dwell time” toward an AI concierge model that delivers one or two curated introductions a week, rather than an endless feed of profiles. According to Charnoff, 38% of Sticker Ventures’ deployed capital sits in the Health & Wellness category - framing the appeal generationally: millennials were “an experiment of unlimited internet access”, he told me, while Gen Z is driving “a huge trend to get back into IRL... experiences.” Charnoff and Sticker Ventures aren’t betting that the attention-economy giants disappear. But the “hipster move” into B2C investments is placing new bets on the next generation of consumer winners built for the time people spend away from their news feeds, not the time they spend scrolling through it. “B2C’s been a big part of Israel’s ecosystem for a long time,” he concluded, listing success stories like Waze, Oddity, Superplay, eToro, Wix, Simply, MyHeritage, and others. “We’ve always been doing this… I just think with AI, there’s a renewed interest to do it… It’s just way more attractive to be a B2C entrepreneur now.” \[Preview: Why building B2C in Israel is suddenly a "hipster move"] Get full access to The Spiro Circle at www.thespirocircle.com/subscribe