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How will Israeli innovation play into the global robotics industry?

This article was originally published on Techcrunch 

In the last few months, a Singaporean University hired Nadine as a secretary, a Boston Dynamics employee pushed over his colleague Atlas who was moving boxes at a factory and Tally, a San Francisco Target employee, began checking to make sure all the products in Aisle 3 are fully stocked.

Nadine, Atlas and Tally may live in different cities and industries, but they have several peculiarities in common. None of them need sleep, food or exercise to operate efficiently.

Imagine employing your own secretary who optimizes your schedule, plans your weekends, reminds you about deadlines and iteratively adapts to your preferences and behaviors at a fraction of the cost of a human. Imagine a factory with no humans, no downtime and no errors. Imagine a retail store without checkout lines or items out of stock.

Humanoid robots have entertained us on the big screen for years as “science fiction,” with films like “I, Robot,” “WALL-E” and Steven Spielberg’s “AI” capturing our collective imagination and spirit. In the last five years, however, the number of VC dollars (see chart below) invested into robotics technologies implies that tens of thousands of engineers, data scientists and management teams are now building robots and robotic technologies that will drastically alter our lives over the next few years.

Many of these advances will come from Israel. In healthcare, we see Mazor Robotics helping brain and spine surgeons, XACT Robotics empowering radiologists to improve accuracy and results and ReWalk enabling the disabled to walk again.

In industrial applications, we see Weldobot and SmartTCP enhancing welding capabilities,Dronomy developing autonomous drones and Caja using robotic technology to develop a sophisticated, self-aware warehouse for an industry expected to grow to $79 billion by 2022. NUA is the world’s first robotic luggage that can follow its owner around and avoid obstacles, and is part of a consumer robotics market that is estimated to ship 100 million units by 2020.

We also see applications for the government and military, such as Roboteam, which enables ground troops to minimize contact with targets by sending in robots that scout, report and eliminate threats. These examples only scratch the surface.

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Just a few months ago, the Israeli Robotics Association signed a $20 million agreement with a coalition of Chinese investors and the city of Guangzhou, one of China’s biggest industrial centers, to develop robots to serve as workers in China. Israeli researchers will develop the technology, and the Chinese will mass-produce mechanical waiters, cleaners, security guards and construction workers. Likewise, robotics startups will need large capital investments to successfully bring their products and solutions to market.

Israel’s contribution to the global robotics industry need not be limited to the robots themselves. Mobileye, the world leader in advanced driver assistance systems has already started software development to power autonomous vehicles, while Argus provides them with state-of-the-art security. Deepsense, Augury, n-Join and Imubit all provide BI and predictive analytics for industrial robots and IoT, while companies like InTalTech provide their docking stations.

Unfortunately, other than Singulariteam’s $100 million fund, few Israeli VCs can afford the risks and timelines associated with financing the R&D of hardware companies. The deep pockets typically come from corporations whose operations and products benefit the most from robotic innovation, e.g. Toyota, Google, Amazon, Alibaba, Siemens and GE. Many of these corporate investors have R&D centers and/or accelerators in Israel, but often will require their investments to relocate and be geographically closer to their production partners.

VC dollars are coming from blue chip funds like Accel, DFJ, Bessemer, Andreessen Horowitz and Dmitry Grishin’s robotics-only funds. Although Israeli companies may share Intel’s vision of a domestic, “Blue-and-White” hardware production line, Israeli companies will need to partner with major players in the U.S., Japan, Korea, Germany and China in order to grow significantly and secure contracts as design partners before the companies are fully operational.

Intelligent robots are no longer science fiction. They are real. They are here. And powered by advances in Israeli technology, they are only getting smarter.

About iAngels
iAngels is a leading Israel-based angel investment network, leveraging best-in-class due diligence to enable accredited investors around the world to gain access to the most-exclusive early-stage technology deals in the market. In less than three years, iAngels has raised over $50m, invested in over 60 Israeli startups, and built a full-service in-house investment team, led by founders Shelly Hod Moyal and Mor Assia. 

iAngels Weekly Deal Digest – June 2nd, 2016

After last week’s $363m funding frenzy, this week was also quite robust, with $95.5m invested across multiple stages

Seed Rounds

  • MetaData, a prospecting tool for B2B marketers raised a $2m seed round, led by Hillsven, with participation from 500 Startups, Greycroft, and RSCM
  • BioBeat, a medical device company focused on remote monitoring of abnormalities, raised a $1m seed round from undisclosed investor
  • CallVU, a mobile engagement tool for Telecoms, raised a $3m seed round, led by Liberty Global Ventures, with participation from 2B Angels, NICE, AfterDox, and Blue Ocean

 

Series A Rounds

  • Lostmy.name, a tool for parents to create personalized storybooks for their children, extended its $9m Series A round by $4.5m, with Project A Ventures the only new investor

 

Growth Rounds

  • WalkMe, an enterprise application helping increase sales and conversions through on-screen guidance, now valued at $400m, raised a $50m Series E led by Insight Venture Partners, with participation from Gemini, Giza, Mangrove, and Scale Venture Partners
  • Signals Intelligence Group, a cloud-based BI tool to help corporates develop new products now valued at $125m, raised a $10m Series C round, led by Qumra Capital, with participation from Sequoia and TPY Capital
  • EarlySense, a continuous patient monitoring solution, now valued at $325m, raised a $25m Series F, led by Bank Hapoalim, with participation from Samsung, Pitango, Mitsui, and Bridge Investment Fund

Thank you for tuning into the iAngels weekly deal digest. If you’d like to receive this digest in your inbox, please subscribe below.

 

Love,
Max

Max Marine
Max Marine is an iAngels Investment Analyst. Prior to iAngels, Max was a Junior Partner at Venture1st, providing marketing and communications support to Israeli start-ups. Max passed the three CFA exams consecutively, holds an MS in Investment Management, and a B.B.A. in Finance, Real Estate, and Risk Management and Insurance from Temple University’s Fox School of Business. Contact him at [email protected]

How Australia can create startup culture as successful as Israel’s

There are things Australia can learn from Israel’s startup scene, according to the assistant minister for innovation Wyatt Roy.

Roy recently toured Israel with a group of Australian entrepreneurs. Hoping to learn something from a startup scene that is growing 26% year-on-year and employs 20,000. In a country with just 8.4 million people, there are 298 “foreign research and development” centres and the tech industry employs 300,000 people.

The need for change was highlighted by the government’s recent innovation report. It labelled Australian companies as “inward looking” and emphasized the importance of an entrepreneurial culture.

 

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How Israel contributed to the major storage industry consolidation

October saw two major acquisitions that rocked the storage industry worldwide. Dell acquired EMC for $67 billion, the largest tech merger in history, and last week, Western Digital bought SanDisk for $19 billion.

As the global giants are enjoying an increase in share value, we cannot overlook the major contribution Israeli innovation and technology has had in these two major plays.

In 2006, SanDisk acquired Israeli M-Systems for approximately $1.5 billion. Dov Moran, known for inventing the flash drive, took M-Systems well into Israel’s prestigious Unicorn Club (startups worth more than $1 billion) and created one of Israel’s big technology success stories.

SanDisk was no stranger to Israel: SanDisk’s co-founder, Eli Harari, is an Israeli himself. Harari knew to push forward and establish leadership in the space. Awarded the National Medal of Technology and Innovation by President Obama in 2014, Eli had a profound impact on the global storage industry.

The acquisition of SanDisk by WD enables the companies to double their addressable market and spread across a variety of solutions, namely hard disk drives, solid-state drives, cloud data center storage solutions, and flash storage.

Considering that this move was announced on the heels of Dell’s whopping $67 billion acquisition of EMC, what we are witnessing is a major consolidation in the storage sector.

Much like WD, Dell now also enjoys Israeli roots.

EMC has acquired multiple Israeli companies over the years. In 2006, EMC bought Kashya for more than $150 million. Kashya, a provider of enterprise-class data replication and protection software was not only EMC’s first Israeli acquisition, it also spawned EMC establishing an R&D center in Israel.

Since then, EMC began gobbling up Israeli companies, acquiring more than ten startups overall for an amount exceeding $1 billion. These included Cyota (through its acquisition of RSA Security in 2006), nLayers (2006), proActivity (2006), Illuminator (2007), Zettapoint (2011), XtremeIO (2012), More IT (2012) and ScaleIO (2013).

These Israeli solutions, which have already been integrated into EMC, will now become part of Dell’s core.

All this feeds directly into the trend we’ve identified when technology giants acquire startups in Israel: It wets their appetite for more Israeli innovation. More often than not, by founding local labs, tech giants find themselves on the ground and able to identify additional opportunities in Israel. Consequently, the companies feel more comfortable conducting additional M&A activity in Israel.

The leadership Israel showcases in the storage space has been an integral strength for Israel for over 30 years, and now this expertise is fueling the growth of two of the world’s IT leaders.

As Israeli entrepreneurs recognize the value tech giants are able to extract from the technology in their proliferation efforts, we expect to see many more acquisitions and unicorns coming out of Israel in upcoming years.

This article originally appeared on geektime

Sharing is Caring: The Rise of Co-working in Israel

The common work space phenomena has taken over Israel.

Entrepreneurs have come to realize that instead of working from their basement, they have the ability to work in a vibrant, dynamic and beautiful work setting that will not only foster their ideas but also create invaluable business connections while still affordable. In the tech sector, companies used to lease old apartments in downtown Tel Aviv, or even parts of existing office spaces of legal firms in Ramat Hachayal. The notion of working out of the basement or the garage was not foreign to most entrepreneurs starting up and renting 50 square meters above a restaurant on Lillenblum or Hamasger st is still fairly common practice. Joining accelerators often requires shelling out some equity in return for a cool place to sit so there were not many alternatives to affordable spaces.
Israel has caught the eye of real estate players like Mindspace and WeWork, who are seizing the opportunity and taking over entire buildings at prime locations. Joining boutique solutions such as SOSA and WMN, it seems like there is a proliferation of co-working spaces, all in the race to create the best in class shared office experience in Israel.

Prime Real-Estate Play

Thinking about the very basic need for the entrepreneur, the co-working spaces are tackling the sheer necessity of a place to sit, and where should this place be. In a word, Location.

Mindspace for example, was the first classic real-estate shared office space that opened in Israel. It enjoys the ultimate prime location for their two buildings. With one at mid Rothschild Blvd and the other at the old building of Tel Aviv’s Stock Exchange, Mindspace is at the heart of everything that is happening in the startup and creator scene in Tel Aviv.

Other co-working spaces are located in suburban areas to support specific communities outside of Tel Aviv like SUBS in Bet Shemesh, MESH in Modiin or Capsula in Netanya.

Mentorship Counts

The young entrepreneur is constantly looking for mentors and people who can provide more value. Co-working spaces provide just that.

For example, SOSA TLV resides in downtown Tel Aviv and its model includes an incubation element, as companies stay for a dedicated period of time only. SOSA brings into the space lectures from industry experts on a regular basis in order to engage and provide ongoing content. The space also has visiting hours with investors, which is incredibly valuable for startups. Rami Bracha from Pitango, Tal Barnoach from Disruptive, Guy Gamzo and Yanki Margalit are only a few of SOSA’s in-house advisory.

Global Positioning

A defining characteristic of the Israeli startup ecosystem is that the local market is never the target market. Other key geographies are the game plan for most entrepreneurs from day one.

At some point, startup CEOs find themselves travelling back and forth, and having an office across the ocean starts making a lot of sense. The global positioning of WeWork (now a $10 Billion business with offices in 12 cities across the US including New York, San Francisco, Boston and Seattle, as well as additional offices in Israel, UK and Netherlands) is a definite plus.

Tenants are able to utilize the different offices worldwide and have the same rooftop to call their home. WeWork established two offices in Israel, with a third location expected to open towards the end of the year.

Synergy Sells

Startups that are scaling their operations are looking for cost saving measures, as well as synergies for their business. Companies providing CFO services, legal counsels, designers, copywriters, etc. set up shop in co-working spaces to try leverage the community for additional business development. This creates a dynamic where the community can self-support: many times, the startups right across the hall provides just the services you need. Sourcing potential business becomes as easy as booking a meeting room on the shared Google Calendars.

Happy Community

Co-working spaces go to great lengths to keep their community happy. There is something very special about Israelis and the fact that they want to hang out together all the time. You see this when you travel the world and Israelis always stick somehow together. Maybe the army has made us more willing to share confined space as we used to share food, showers and tents with one another. The sense of comradery escapes not another important element.

More often than not, the way to an entrepreneur’s heart is through his stomach. Kitchens are well equipped with Nespresso machines (also Elite coffee if we are on the subject of army service), fruit, popcorn and dog treats. Yes, many of the co-working spaces are a-man’s-best-friend friendly.

Almost every day there is something going on. At Mindspace there is Theme Lunch on a weekly basis, and happy hours every Thursday. SOSA created a coffee bar in the middle of the space. Community managers at WeWork take care of your every need. Generally co-working spaces are now competing on services beyond just physical premises.

Delicately Dedicated

WMN, a new co-working space located at the TLV port, is inviting only women entrepreneurs to join and have a dedicated space catering to their needs. SUBS, the new co-working space in Beit Shemesh, is targeting entrepreneurs outside of Tel Aviv. The two differentiate based on the community they are targeting.

This approach will probably only grow in the future as more dedicated spaces are created for sub groups, such as designers, architects, etc. This actually is the opposite of creating a single co-working space which can house many disciplines. It goes to show that sometimes there is merit in residing together with people who are more similar to you and have similar requirements.

Funding Helps

Not only Israeli startups scaling up choose to house their operations in a co-working space, but also investment houses and angel investors. For example, Mindspace is the home of many investment houses. TLV Partners, the new fund by Rona Segev and Eitan Bek is planning to sit at Mindspace, joining other investors such as YL Ventures, Upwest Labs, Eilon Tirosh and other individual investors.

At SOSA, some members are actually angel investors who host their visiting hours or startup meetings at SOSA. Pitango for example, with offices in Herzelia, holds a weekly meeting there because it is an opportunity for them to see companies and meet other investors.

It appears that investors value coming in close contact with the ecosystem on a daily basis. Entrepreneurs can probably complete a funding round with investors and never leave the building.

Larger companies like to partner with these co-working spaces to get a chance to mingle with the hot new entrepreneurs who may go on to create the next big success stories of Israel. Microsoft Ventures, IBM, SAP, Meitav Dash, LeumiTech and others have partnered with key co-working spaces as everyone wants to enjoy the deal flow and potential business.

As a trend in Israel, this would only grow bigger and better. In the shared economy boom we are living in, renting out a larger space than you actually require and subleasing to others is a co-working space in the making. The talk of the town is that everyone wants to do it, but effectively only a few have been executing successfully on a large scale vision. The commoditization of the startup real estate business is coming to a point it will be the standard for funded companies. We will all find ourselves sharing instead of moving out solo. There are many merits to the concept which have made it a worldwide success. It would be interesting however to learn how larger companies might adopt the concept as well, allowing it will leave room to develop a personalized brand identity within the common space. Will the same economies of scale prove worthy to organizations housing 30 or 50 people in a shared space or will it remain a solution for scaling up businesses?

 

This article originally appeared on TimesOfIsrael

After a Chinese sell-off, is Israel next?

Since 2011, nearly 80 Israeli companies have raised money from Chinese investors, 30 new Chinese investors have entered Israel, and 11 Israeli venture capital funds have raised Chinese capital. In light of Monday’s accelerated selloff in Chinese stocks, what impact will the faltering Chinese economy have on the Israeli tech industry?

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How Lucrative Israeli Tech Investments Opened Up To Global Investors

Two women have taken on the task of connecting high-return Israeli tech start-ups with the angel funding they need to take off. It’s been a challenge, despite the track record of such companies.

Angel investors are beating out venture capitalists when it comes to Israeli tech companies. Between January 2011 and July 2014, nearly half of the most profitable investor exits were funded exclusively by angels, according to iAngels, an equity crowdfunding platform. Although angels invested smaller amounts of money than VCs, they reaped the high rewards that VCs crave: 10 to 30 times returns. They also did it in three years or less which is far faster than the five to seven years for U.S. companies reported by CB Insights, a data company that tracks investments in private companies.

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The making of an Israeli entrepreneur

I’m often asked why I decided to move back to Israel from New York to found iAngels.

Growing up in a high tech home, and later marrying into one, I found myself surrounded by talented entrepreneurs – young and ambitious colleagues, peers, and friends who have gone out to change the world by creating a product that launches into international markets. The dynamic Israeli startup ecosystem, with over 1,000 new startups founded every year, has cultivated a generation of young men and women with technology innovation at heart, and a determination to succeed despite the hardship along the way. This is my generation.

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