High-Tech Club Expands Beyond Discounts to Empire

HitechZone, initially a consumer club for high-tech employees, has evolved into a sprawling empire under founders Noam Busidan and Dagan Ronen. What began nearly 18 years ago with a modest investment and a vision to offer discounts has grown into a company with an estimated annual turnover of 1 billion shekels, employing around 300 people and boasting 400,000 members from 2,800 companies. The club has aggressively expanded its operations beyond traditional discounts, venturing into significant acquisitions and establishing its own ventures.

Recent acquisitions include a 50% stake in the furniture brand Koala for an estimated 30 million shekels, a 50% stake in the children's daycare chain "Pashut Gan" for 5 million shekels, and 100% of "Walla!Shops" in September 2023 for 20 million shekels. HitechZone also acquired a 30% stake in the investment house "Kavan" for 5 million shekels, with an option for an additional 15%. These moves are part of a strategy to bypass intermediaries and secure deeper discounts for members, aiming to be relevant during major financial decisions like purchasing a car, home, or making investments.

The company has also launched its own operations, including HitechZone Motors, which has committed to purchasing 150 Toyota Yaris Cross vehicles for approximately 20 million shekels. In the education sector, HitechZone is investing around 15 million shekels to establish a network of daycare centers, initially opening in Herzliya Pituah and Tel Aviv, with plans to expand to about 20 centers in the coming years, prioritizing club members. This expansion into daycare is driven by identifying a genuine need among their target demographic of long-working parents.

In e-commerce, HitechZone sells hundreds of millions of shekels worth of products annually, primarily electronics, and holds over 60% of its inventory in two logistics centers. They have also opened five physical stores, two in Eilat and three in high-tech hubs. The company emphasizes that even high-earning tech employees, earning up to 40,000 shekels net per month, are actively seeking savings due to high living costs in Israel, particularly housing expenses.

Busidan and Ronen, who have been friends since childhood, view their work as a passion project, constantly seeking to innovate and take calculated risks. Despite the company's substantial growth and diversification, they maintain a focus on providing tangible value to their members, aiming to be more than just a discount club but a comprehensive service provider within the high-tech ecosystem.