This summer, it’s raining unicorns — tech startups valued at more than $1 billion — and as a result the Israeli tech scene is going absolutely crazy. Business Insider just spent a week in Israel meeting with over a dozen tech companies, and VCs. They all told us: Everyone is dreaming of becoming the next unicorn. Instead of selling their startups for $1 million to $30 million, founders are turning down multi-million acquisition offers wanting to build big companies. 2015 is a record-breaker for VC funding. For the first half in 2015, 342 companies have attracted $2.1 billion, up from 334 companies nabbing $1.6 billion in the first half of 2014. The private equity bankers have arrived in droves, including Blackstone, SilverLake, KKR, Apax Partners, TPG, JPMorgan and Morgan Stanley, and they're writing writing huge checks. Chinese investors are swarming the country, joining Israeli VC funds as limited partners as well as doing a lot of huge, direct investments into startups, too."If we're going to do $4 billion in venture in 2015, the estimate I heard is that at least $500 million of that will be Chinese money, and that’s direct investment not including the LP stuff," Israeli powerhouse VC Jon Medved told Business Insider. "And I think that’s probably underestimated.” Medved, founder of investment startup OurCrowd and is widely known as one of the fathers of Israel’s tech startup scene. Chinese investors are “at all the parties” a startup founder told us.The joke here is that Israeli border control needs to open up a special customs line “just for Chinese investors with bags of money that they can just get in the country for free,” Medved quipped. This hot economy has led to ... Big well-funded Israeli companies starting to acquire other Israeli companies for big sums of money, too. The first crop of Israeli serial entrepreneurs, such as Avigdor Willens, who sold Annapurna to Amazon earlier this year for a reported $350 to $375 million. Willens sold his first company, Galileo, for $2.7 billion in stock back in 2000 to Marvell Technologies. It started when Google dropped a billion on Waze When Google bought Waze for $1 billion in 2013, it was a milestone event for the country, says Medved. “Billion-dollar companies are now all over the place. Waze was the first and most important,” he told us. Waze co-founder Uri Levine explained to Business Insider, “This was the first time a billion-dollar app, and a consumer app, came out of Israel,” and it set “a new beacon for Israel” telling entrepreneurs to aim higher than a quick exit. The next year, Japan's Rakuten (the eBay of Japan) acquired Israeli messaging app Viber for $900 million and unicorn fever in the country began. Over and over, startup founders told us they had no interest in selling their successful companies, some of which were doing millions of dollars in revenue, some of which were doing hundreds of millions in revenue. They wanted to grow their companies past $1 billion to many billions. “Israel entrepreneurs are obsessed with building unicorns,” Hillel Fuld, CMO of Israeli startup Zula told us. Billion dollar startups include … Taboola (who raised $117 million in February, $157 million total) IronSource (who raised $105 million in two rounds from private equity funds run by JPMorgan and Morgan Stanley), Outbrain (who filed confidential SEC documents for an IPO at a reported $1 billion valuation) Conduit, who said it was the first Israeli internet unicorn, in 2012 There’s also a new crop of public tech companies worth $1 billion: MobileEye: IPO’d in 2014, with $12 billion market cap today CyberArk, also IPO’d in 2014, market cap of about $2 billion Wix, IPO’d in 2013, market cap of about $900 million And there's some half-unicorns, like Varonis Systems, which IPO’d in 2014 and has a market cap of nearly $600 million, nothing to sneeze at. Asian money everywhere "The Asia stuff is very dramatic, very real and very new," says Medved. "China is the big story. But Japan for example — there had never been a visit of a Japanese Prime Minister to Israel before. In all the years of Israel’s existence, what did they have to come here for? This year, the Japanese Prime Minister shows up for four days, all tech.” Meanwhile, Korea’s Samsung Ventures has now made "8 investments here over the last year," says Medved. Plus, "there are now Israeli companies going to list on the Singapore exchange." Israel will also be hosting the Indian Prime Minister for the first time. In February, Indian company Infosys (now run by SAP’s former US CTO Vishal Sikka) bought Israeli company Panaya for $200 million. India has plans to build an R&D center here. Still China overshadows them all. Investment are pouring in from Baidu, Fosun, Alibaba, Tencent, RenRen and others. Famous Chinese angel investor (and billionaire) Li Ka Shing and his Horizon Ventures fund are all over the country. Horizon was an early investor in Waze. And he’s invested in about 29 Israeli startups, including Waze founder Levine’s latest baby, FeeX, (raised $9 million). If there's a downside to all of this, its that Israel is starting to experience a severe talent shortage. They are now poaching each other's employees and trying to keep employees from leaving by offering better and better Valley-like perks. IronSource, for example, flies its 550 employees to one exotic offsite meeting every year. The whole company just got back from Greece. "Once a year, we party," CEO Tomer Bar Zeev told us. "That builds culture. It's one of the best investments we can make, investing in the company." If that fails, Chinese billionaire Li Ka Shing has an answer. He also donated $130 million to Israel’s Technion, the Israeli Institute of Technology (like the MIT of Israel), one of the largest ever donations received by an Israeli university.SEE ALSO: How Fitness22 is making 'millions of dollars a year' selling iPhone apps with no marketing Join the conversation about this story » NOW WATCH: An Israeli Company Just Solved Solar Energy's Single Most Mystifying Problem
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