Israel Innovation 2.0

Inside Israeli Technology

Browsing Posts tagged Industry pulse

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.

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During the week of April 26, 2009, Israel celebrated its 61st annniversary while its first solar farm powering a small community was inaugurated. ETV Motors raised $12 million in funds and N-Trig announced its latest advancement in multi touch. Sadly, also during the week of April 26th, Israel’s hi-tech industry lost one of its beloved leaders and pioneers, Nahum Sharfman in tragic plane crash in Greece.  Sharfman was the founder of the security company CommTouch and the price comparison site, Shopping.com. For these stories and more, check out this week’s 12 Israel-related headlines below. 

Cleantech

1. Israel Inaugurates Unique Solar Farm

2. Solar Thermal: Which Technology Is Best?

3. ETV Motors Revs Up $12M

Investments

4. Venture capital investment in Israeli high-tech companies lowest in three years, report

5. Where did all that R&D go?

Information Technology

6. Intel bolsters cooperation with Israeli companies

7. N-Trig launching software to enable more versatile multi-touch displays

8. Start-up Axxana ties disaster recovery gear to EMC software

9. Will XP Mode Be Tough Sell For Small Businesses?

Miscellaneous

10. Israel celebrates 61st Independence Day

11. Can Israeli technology stop swine flu?

12. Plane crash kills high-tech leader

The 2009 RSA Conference kicked off yesterday in San Francisco. As the conference is the biggest annual information security one in the world and Israel is a leader in the field, several Israeli companies are present this year as sponsors, exhibitors, speakers and attendees. Some of the companies exhibiting and attending include:

Hot topics expected to be discussed in depth throughout the conference are cloud computing security, conficker worm and the conflict between national security concerns online and the protection of citizen’s rights.

Though reports indicate that overall attendance at the conference this year is significantly lower than in previous years due to the state of the economy and companies cutting back, it is unclear how this has impacted participation and attendance among Israeli companies compared to past years.

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The week of March 29, 2009 was one of the busiest weeks of the year for Israel’s Web industry, with conferences and events happening everyday. Three bigg events were TheMarker’s COM.Vention on Sunday and Jeff Pulver’s Tel Aviv breakfast and Techonomy on Tuesday. While these events showcased Israel’s most promising Web startups, there was buzz about Israeli companies starting to bypass the US market and target the market in China. For more on these stories and the rest of this week’s 13 Israel-related headlines, see below.

Cleantech
Israel’s Aora Solar To Begin Clean Energy Production

Leviathan looks to wind energy device sales

Global VC Funding of Clean Tech Plunges

Investments and M&A
Building A Bridge Between Israel & China

Israeli Entrepreneurs: Know What Game You Are Playing

The tycoons’ companies don’t create jobs

Information Technology
AICC member Unisfair Launches Channel Program to Capitalize on Growth of Virtual Events 

Savvy entrepreneurs tapping risk (CTERA)

XMPie and NowDocs Introduce XMPie-enabled NowPrint 7.0

SaaS’ Testuff Nabs 2,000th Customer

The curious case of face.com

Miscellaneous
Techonomy 2009: Great Startups And Amazing Event

MyHeritage: Avoiding the MetaCafe Curse

Impressions of TheMarker’s COM.vention from a new immigrant (Israel Innovation 2.0 coverage from guest blogger Jessica Korman)

The following is a recap by Jessica Korman of TheMarker’s COM.vention which took place earlier today. Jessica Korman is a graphic designer, blogger and new immigrant. 

themarkercom“The future is already here, it’s just not evenly distributed yet” – William Gibson

I just got back from The Marker COM.vention held at Airport City. It was a great opportunity to see “Twitter” friends whom I may or may not have met before. While social media is not a dying trend, it is still important to connect to people on a personal level. That was my main purpose in attending the convention; as a new immigrant in Israel I find myself in the midst of a networking frenzy. In that respect, social media is a tool, a means to an end and not the end itself. 

The convention itself had 2 tracks, ‘The New New Thing – NGN’ sponsored by Bezeq, and ‘Beyond the web 2.0.’ I attended two panels within the ‘Beyond the web 2.0′ track. The first panel I attended, “Beyond Web 2.0,” was moderated by Israel’s Hi-Tech guru, Yossi Vardi and included Anil Hansjee, Head of Corporate Development EMEA, Google (UK, London); Allen Hurff, SVP MySpace; Jane Thompson, Managing Director, International, IAC and Greg Cohn, Director of Strategy and Business Development Yahoo!  as panelists.

Yossi Vardi, LeWeb 2008

Yossi Vardi, LeWeb 2008

They discussed how the Internet is moving from our PCs (or in my case, Mac) onto a smaller screen, such as the Android or iPhone and other trends, such as social networking, semantic web and cloud computing, and that search engines are evolving with those trends. The discussion also brought up that there will also be more engagement with entertainment, for example more interaction between the consumer and the advertiser. They concluded that social networking needs to evolve by indexing our relationships, and we must trust our networks to make our privacy decisions for us. From an entrepeneaurial perspective, the economic downturn is actually a great opportunity for start-ups.

The second panel I attended was “Microblogging, Substance or hype.” It was moderated by Gadi Lahav, Director of Internet Content at Haaretz Media and the panelists included Deborah Schultz, Consultant, Advisor and Strategist to Start-Ups and Large Organizations; Yosi Taguri, VP R&D and Social Thinker at Nuconomy and Joi Ito, CEO of Creative Commons. The panel was basically about Twitter, and, in fact, one of the panelists tweeted that this might be the only time it is socially acceptable to tweet when part of a panel.

Deborah Schultz, October 2008

Deborah Schultz, October 2008

They said that the idea of microblogging is socially connecting on the fly and that it broke the “real-time” barrier. While Facebook is a database of social connections, Twitter is a constant flow of content and ideas. Actual blogging is much slower but that is not to say that Twitter will be the death of blogging. It might mean less frequent updates or less people creating new blogs, but blogging will still remain part of the conversation.

At this point in time, it is imperative that corporations learn how to participate and use social networking with their branding and marketing. Companies need to learn to use the tools to listen to customers, and let the users know they are being listened to. What still needs to be determined is how to monetize microblogging sites such as Twitter and we have yet to see a business model. The question was raised by one of the panelists, that at this point, does Twitter even need a business model?

What was clearly a sign of the times was the scaling back of emenities commonly found at conventions such as these. Instead of coming home with an armful of gifts, I came home nearly empty handed. Most of the stands were giving away chocolate coins instead of shwag.

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During the week of March 22, 2009, it was announced that Israel will share its farming technology with Kenya and more details of the government’s water technology initiative, NEWTech were given. The sale of Aladdin Knowledge to Vector Capital was completed with the news that Aladdin and SafeNet were under common management and information security company, Tufin, added new features to its firewall management platform. Facebook became even more stalkerish with a new photo facial recoginition and tagging application by Israel-based Face.com and SEO guru, Barry Schwartz shared what he found Israeli SEMs are looking for. These stories are only some of the main ones that made it into the media last week. For links to these and the rest of the stories from the week of March 22, 2009, check below. 

Cleantech and Environment

1. Israel NEWTech, A Government Initiative To Promote And Grow Israeli Water Technology And Innovation

2. Israel to share farming technology with Kenya

Investment and M&A

3. Value of Israeli high-tech M&A fell 19 percent in 2008

4. Funded: GoViral, BriefCam, Extreme Reach (BriefCam)

5. SafeNet, Aladdin Knowledge Under Common Mgmt

Information Technology

6. HP to Provide Compaq My Bhasha with its Desktops

7. New Cyber-Ark controller clocks all super-user activity

8. SkillIQ is set to Revolutionize the Human Resources World

9. Dell Certifies Aternity as ISV Partner

10. Tufin adds white lists to firewall management platform

Miscellaneous

11. Israel’s Explay helps you see the big picture

12. First Look: Photo Finder facial recognition app for Facebook

13. Drops in the bucket

14. Partnerships between Florida, Israel are key

15. What Israeli SEMs Want

Bonus: TechCrunch’s Sarah Lacy in Israel and reactions. 

Sarah Lacy, August 2008

Sarah Lacy, August 2008

Last week Twitter and the Web erupted when the newest member of the TechCrunch team, Sarah Lacy, posted that Israeli entrepreneurs lost their mojo and that investing in Israel was overhyped. Here are are just some of the responses to Lacy’s post as well as her post and its follow up. 

Now that China Is the New Israel…What’s Israel? (TC)

What’s behind Sarah Lacy trash talking the Israeli VC scene

Israel is the new Israel (Israel Innovation 2.0 response)

Israel Hype Cycle

Sarah Lacy, David Li and the Wrong Side of Historical Performance

Risk Aversion And The Perils Of Selling Too Early (Israeli Startups, Part II) (TC)

Twitter responses

Twitter responds

Sarah Lacy over at TechCrunch posted today that Israeli entrepreneurs post-bubble have lost their mojo and VC funding has reflected that. There has been a lot of reaction to her post in the comments section and off the site, but it is really much more complex and wide-ranging than a post on TechCrunch or even here on Israel Innovation 2.0 can handle. I think that Sarah is both right and, of course, wrong.  

She is right that the crop of Israeli IT and Web startups are disappointing when compared to Check Point and ICQ from the 1990s. There have been many theories, denials and other responses of the lack of companies of this caliber in the past few years and I have to say, when researching these different companies, there definitely is a difference. 

The theories for this that I believe and have often mentioned (sorry to anyone familiar with those posts) are the ones Daniel Cohen of Gemini Israel Funds wrote about in an article on Venture Beat back in the fall of 2007: “Entrepreneurs want to retire with $3-$4M, Impatience of investors, ‘Think small’ mentality and The lack of $1bn experience.” Add to these reasons the brain drain of top engineers and entrepreneurs and relocating the company outside of Israel and Lacy has a very good point. 

Fortunately though, Lacy’s post on TechCrunch was only fulfilling a certain agenda and only relevant for the IT and Web 2.0 sectors which TechCrunch covers. No matter what happens with Israeli IT companies in the future (and I believe Israeli SaaS and security companies, such as Clarizen, Imperva and Trusteer all have a lot of potential), Israel is almost guaranteed to be the main player beyond this in the next tech revolution, clean technology. 

A lot of VC funding has gone into cleantech companies in wastewater management, solar energy and wind energy that won’t mature and really show its worth for another few years. In addition, there is a noticeable trend over the past year of people from Israel’s IT sector considering and heading into cleantech.

So, where does China fit into cleantech? I haven’t researched it to say, but on the Israel end I know that China, along with several other Asian countries, countries in Africa and Australia have all expressed interest in Israel’s innovations especially to deal with water conservation management and solar energy. If in relation to Lacy’s article, China is getting more investments in IT (the greatest tech sector in the past) in comparison to Israel but not in relation to cleantech (the likely greatest tech sector in the future), the answer to Lacy’s question about “If China is the new Israel..” would really be that Israel is the new Israel.

The annual South By Southwest Interactive (SXSWi) conference kicks off in Austin, Texas tomorrow and will run through Tuesday afternoon. I’ll be at the conference, which celebrates emerging technology, some of the days and will, of course, be paying close attention to any Israeli representation there, specifically by, ooVoo, which will be exhibiting there. 

oovoologoooVoo is a video chat and communication service that offers everything from high-resolution video and video conversation recording to telephony and video and instant messaging. The company will be presenting its new API for video application developers at SXSWi.  

In addition to ooVoo, I will be keeping a lookout for Ouriel Ohayon, the VC and former editor of TechCrunch France, who recently launched the Topify application for Twitter with Arik Fraimovich. Topify replaces the current text of the email that Twitter sends out notifying you when someone follows you with an email that includes in addition to the person’s name and Twitter link, their profile information and an option to follow them back directly from within the email. 

Will you be at SXSWi? If so, let’s meet up! Send me an email at lisa@israelinnovation20.com or post it in the comments below.

eilatgreenWhen the second annual Eilat-Eilot International Renewable Energy Conference took place recently with over 700 attendees, it was known and expected that some representatives from both the Israeli and US governments would be there to talk about new projects between the two governments and that there would be other officials from state governments and municipalities there to learn more about cleantech and the solutions for municipalities offered by the vendors in the exhibition. What was less expected was to learn about the collaboration efforts to go green being undertaken on the U.S. state and municipality level with Israel’s southern region. 

During the conference I had the opportunity to meet John A. Berenyi, an alternative energy advisor who has been a key figure in initiating these joint projects. In July 2008, through his efforts, South Carolina became the first state to sign a collaboration agreement with the Eilat region. Under the agreement, the two will conduct research together on alternative and renewable energy opportunities and “promote a more sustainable environment and enhance the quality of life for the citizens of both regions.”

On a more local level, Mt. Vernon, NY is interested in becoming the first green municipality in the United States and is willing to be the first lab for using different Israeli technologies, and has become a sister city of Eilat’s to do so. 

Berenyi’s plan is to expand collaboration efforts between state and municipalities and the Eilat region. Tapping state research programs and state VC funds will help make more joint efforts possible as will President Obama’s stimulus plan, which, hidden in little bits, has over $40 billion for alternative energy and sustainable projects that can be good for mature Israeli companies.

techaviv_logoSince I attended TechAviv two weeks ago, in which nearly half the startups there were early stage and pre-seed, I have been thinking a lot about the discussions on getting funded that took place there and earlier that day at Eze Vidra’s VC Cafe breakfast and in general.

It has been clear for several months now that VCs are being more conservative in choosing companies to fund and that those that do get funding, are generally receiving less than they would have in good times. Additionally, somewhere along the way in the past few years, VCs have become more concerned with the capital aspect of what they do which has led them to invest in fewer “ventures.” They are taking less risks, such as by not investing in ideas, and are looking more for “ventures” that have already proven themselves a little – in many cases, by already becoming profitable or developing the technology. Whether this is good or bad, it’s just the way it is.

Since an angel investor panel, which included Yossi Vardi, at TechCrunch50 in September 2008 discussed what the decrease in VC funding would mean for them, I have constantly heralded angel investments as an alternative to VC funding and one that would still thrive… then the stock market and economy crashed. While that was already a few months ago, The New York Times had an article earlier this month titled, Angels Flee From Tech Start-Ups, about how bad it has really been and is for them. 

So, hypothetically removing VCs and Angels from the startup funding equation, what other sources of funding are there in Israel? For more established startups, close to nothing. 

For small startups and individuals though, here is a list of nine alternative funding programs:

  1. Israel Internet Society Research Grants
  2. US-Israel Binational Industrial R&D Foundation (BIRD)
  3. US-Israel Binational Science Foundation (BSF)
  4. Intel-Annual Research Grants Program
  5. Technion Research and Development Foundation
  6. Israel Science Foundation
  7. Incubators (Ministry of Industry, Trade and Labor Office of the Chief Scientist)
  8. Call for proposals (Israel Ministry of Science, Culture and Sport)
  9. Yozma Group