Israel Innovation 2.0

During the week of June 21, 2009, Microsoft confirmed acquiring the motion sensing technology company, 3DV and its connection to Project Natal. Ad optimization platform, TodaCell raised $1 million and networking and business continued at TheMarker conference in New York. For these stories and more, check out this week’s 11 Israel-related headlines below.

Cleantech
1. Renault’s EV Features A Swappable Battery

2. Water, Water, Everywhere. And Not a Drop to Drink?? Part I

3. Converting Air into Water In Israel

Investments
4. Where Tel Aviv meets New York / Schmoozing business at TheMarker conference

5. Tel Aviv Stock Exchange

Information Technology
6. Exclusive: TodaCell Raises $1 Million for Mobile Ad Optimization Platform (Interview with CEO Moshe Vaknin)

7. Conduit’s Browser Toolbars Serve Up Web Sites To Go

8. Magic Delivers Stronger .NET Client with uniPaaS 1.8

Miscellaneous
9. Microsoft confirms 3DV acquisition, Project Natal connection

10. StePac introduces degradable packaging

11. British teens get a taste of Orthodox Israeli life on reality TV

During the week of June 14, 2009, Israel was named a developed market which will be effective in 2010 and its economy was hit less hard due to the high tech industry. While the protests, demonstrations and online activity heated up in Iran, Israel’s Fring announced that its software was being used by several protesters and helping their cause. Inside Israel, the biggest news was that the iPhone from Apple will finally be coming to Israel officially. For these stories and the rest of this week’s 10 Israel-related headlines check below.

Cleantech
1. The Next Solar Frontier: Distributed Inverter Architecture

2. Fifty Best Tech Startups

Investments
3. Israeli exports hit less thanks to high tech

4. Israel Named Developed Market at MSCI, Korea Isn’t

Information Technology
5. Storage Startup Axxana Announces the Availability of the Phoenix System

6. Update on the Cloud

7. Iranian protesters using Israeli software

8. Blue Coat ProxyClient Software Gains OESISOK Certification

Miscellaneous
9. Israeli carriers line up to sell iPhone

10. Coca Cola Israel develops new flavor

During the week of June 7, 2009, research showed that the recession has impacted VC plans, which was long suspected and that cleantech investments faired the best of the different sectors. It was revealed that Intel’s recent acquisition of Wind River Systems includes an R&D center in Israel while the investment and Israeli startup series on Israel Innovation 2.0 continued with a closer look at Answers.com. For these stories and more, check below for this week’s 10 Israel-related headlines.

Cleantech
1. Giving New Meaning to ‘Electric Avenue’

2. Flower Power: World’s First Hybrid Solar-Gas Turbine Turning on Soon

Investments
3. Deloitte survey shows recession hit on VC plans

4. All that glitters / Nothing ventured, nothing lost

5. Israeli startups during the economic crisis: Answers.com

Information Technology
6. Intel acquisition has Israel center

7. Peer39 Digs Deep With Semantics

8. The ‘Final’ Frontier of Algorithmic Trading

Miscellaneous
9. Nike to Introduce Shoe Recycling Program in Israel

10. Madonna announces second concert in Israel this summer

In the first post of this series, I wrote about The Israel Conference which took place in LA last week and how its purpose was “to showcase Israeli excellence in technology and products and to expand business and investment opportunities between Israel and California.”

The conference had more than $20 billion in capital represented and brought together over 50 Israel-facing companies for a day full of presentations and advice from some of Israel’s most well-known investors (Jeff Pulver and Yossi Vardi) and most successful startups (i.e., Check Point, Tigo Energy, Answers.com, etc.).

Bob Rosenschein

Answers.com is one of the most interesting websites coming out of Israel. It was founded by current CEO, Bob Rosenchein in 1999 as GuruNet and struggled as a desktop software company before its reincarnation as the Web-based answers service, Answers.com in January 2005.

The site which used to dub itself an “encyclodictionalmanacapedia” started out licensing content from encyclopedias and dictionary companies, such as Barron’s, Miriam-Webster and Wikipedia among over 250 others. In November 2006, the company acquired the user-generated Q&A site, FAQ Farm and renamed it WikiAnswers.com.

WikiAnswers has since fueled Answers.com’s current growth, which, in a recent interview I had with Bob Rosenschein, he attributes to a successful cycle of “Traffic. Questions. Answers”- traffic leads to questions being asked which leads to questions being answered on a continuous basis.

WikiAnswers

The increased traffic has led Answers.com to become one of the top 20 fastest growing websites in 2009 and the site to become profitable.

“The biggest news of 2008 for us was that in the second half of 2008 Answers.com turned profitable,” Rosenschein explains.

Answers.com’s profitability isn’t just from an increase in traffic though. As it has shown from its GuruNet days, it isn’t afraid to make changes and tweaks to anything. To increase profitability, the company changed its revenue model in 2008 moving from direct ads to display ads and performance ads, “the performance ads being the most profitable.”

Among the constant tweaks the company is making, we can expect to see in the next year “improvements in search, more functionality and internationalism.” The site will be made available in the languages of non-English countries that currently provide significant traffic to the site.

Rosenschein’s advice to startups is, “Be flexible. Roll with the punches, hold onto cash and be able to adapt. The most important thing is perseverance- don’t give up too quickly.”

Update June 15, 2009 Globes reported today that Answers.com has raised an additional $7 million from Redpoint Ventures.

(Disclaimer: As part of a work experience program in the summer of 2006,  I interned at Answers.com in Jerusalem for six weeks.)

During the week of May 31, 2009, Sunday Energy, SolarEdge and Ormat all had major announcements related to providing alternative energy in Israel, while GameGround and The Box successfully raised funds. In IT, Discretix explained the threat of bank accounts being hacked on mobile phones and Trusteer signed a contract with PSECU in England. For these stories and the rest of this week’s 15 Israel-related headlines, check below.

Cleantech
1. Sunday Energy forges new ground in Israel with Ormat

2. Israeli firm boosts performance of photovoltaic solar array

3. Exploiting Limited Resources

Investments
4. GameGround snags $4.1 million from Sequoia for gamer services

5. Investment in Green Energy Quadruples in 4 Years

6. Israel’s The Box Secures Funding from Greylock Partners to Target US and Other International Markets

Information Technology
7. PC Touch-Screen Technology Moving Beyond Curiosity

8. How much serious is the threat of hacking bank accounts via mobile phones? (Discretix)

9. PSECU Secures Web Channel with Trusteer

10. Virtualize Your Internet Connection with BufferZone

11. WatchDox Makes Document Security Simple

Miscellaneous
12. Central Park’s Tel Aviv ‘beach party’

13. Video: Microsoft’s Project Natal in action

14. Nestle producing new breakfast cereal in Sderot

15. Brain research center to be built at Hebrew University

Despite the economic downturn, Israel’s startup scene is as strong and vibrant as ever. Just as the innovation hasn’t stopped, neither has the need for outside funding to develop these exciting technologies. Several conferences and forums have been organized in the past few weeks to maximize the access of Israeli startups to the funding they need. One that hasn’t happened yet, but will on June 4th in LA, is the The Israel Conference.

Considered the first of its kind, The Israel Conference will have more than $20 billion in capital represented when it brings together over 50 Israel-facing companies to showcase Israeli excellence in technology and products and to expand business and investment opportunities between Israel and California. 

Presenters and panelists include Yossi Vardi (“the Father of Israeli Hi-Tech”), Erel Margalit (founder of Jerusalem Venture Partners, a venture capital fund) and Jeff Pulver (social media guru and VoIP pioneer) . The presentations will cover a wide range of topics from a look at VCs and the CEOs they back (why they were funded and the results today) to green tehcnology (how innovation in that field is helping the earth and changing our lives) and sales opportunities in a slow economy (where the money is, what the current market is like and how Israeli companies are maintaining a competitive edge). 

Some of Israel’s overall edge and Caifrornia’s role in it can be attributed to the following:

• Israel has over 8,000 patents from a population of just 7 million. 
• Within the past 15 years, major companies have risen that were developed in Israel and have their corporate office in California with job creation in the hundreds of thousands, world-wide. A number of these are Fortune 500 today with corporate offices in California such as Check Point, Zoran, and Amdocs.
• Israel has the largest number of scientists in the world per capita at 145/10,000 compared to the US with 85/10,000.
• In 2008, over $2B in capital was invested over 480 Israeli high-tech companies, an increase of 18% over prior year with 50% coming from funds outside of Israel, mostly from the US.
• Over the past 3 years, Israeli firms raised $2.3Billion in IPOs on exchanges around the world while over $18B was spent on acquisitions of Israeli High Tech companies.

The conference will also feature a presentation by Bob Rosenschein, the CEO and Founder of Answers.com, one of the Top 20 fastest growing Websites. I recently had the chance to interview  Rosenschein and will post about that next in this series.