Start-Up Nation Central plays a critical role helping foreign corporations navigate through Israel’s booming tech ecosystem of over 6,000 start-ups, 200 tech hubs, 380 investors, and 16 university tech transfer offices. “Israel is the world’s open innovation beta-site, and SNC is the gateway to this ecosystem,” says Eugene Kandel, Start-Up Nation Central’s CEO.
BNY Mellon is just one example: It took Suresh Kumar, Senior Executive Vice President and Chief Information Officer of BNY Mellon, a global banking and financial services company, 48 hours to understand that his New York-based bank, with $1.9 trillion under management, urgently needed to engage with Israel’s start-up ecosystem. That was in March 2016, and it was Kumar’s first visit to Israel.
At the summary meeting of that first visit, Kumar instructed his team to immediately hire, in New York, a liaison to the Israeli ecosystem to strengthen BNY’s connection to start-ups in Israel. That was just the first step. BNY executives made three subsequent visits, hired a local liaison in New York, opened a Tel Aviv innovation center, and embarked on proof of concept contracts with several start-ups in fintech, cyber and blockchain. BNY also co-hosted a blockchain summit with Bank HaPoalim, Israel’s largest bank.
“Start-up Nation Central’s delivery of key market innovators, new technologies and pivotal ecosystem participants has contributed directly to the milestones achieved in BNY’s efforts to date,” says Kumar.
60 full engagements per year
Since incorporating in 2012 as a non-profit tech NGO (the idea was based on the 2009 book ‘Start-Up Nation’), SNC has helped some 260 companies from 52 countries connect to the Israeli innovation ecosystem. Those companies have met with almost 800 start-ups from across the spectrum of advanced technology,
including agri-food tech, cyber, autonomous cars, blockchain, digital health, and many others.
SNC hosts around 60 full engagements per year – each one led by key decision makers in those companies, each one tailor made, and each one usually followed by a decision to engage with the Israeli ecosystem in some way. SNC has seen significant success in the impacts from these engagements, measured in the establishment of new innovation centers, the signing of commercial agreements, local investments, POCs, joint ventures, and the hiring of local liaisons.
The message, says Terry Kassel, SNC’s co-founder and Chairperson of its board, is: “If you’re not in Israel, you’re missing something.”
While U.S. firms are well established here, and Asian companies are increasingly taking their first steps in Israel, European firms, who are closer to the Israeli ecosystem, continue to engage with Israeli tech in higher numbers.
In 2017, AXA launched an insurance technology competition with a $1M investment prize. “We expected to be impressed, but we were more impressed than what we thought we’d be. What struck us was the variety, the intensity, and how diverse this ecosystem is,” says Michael Niddam, Executive Partner of Kamet, an insurance tech innovation hub funded by the AXA Group, which set up shop in Tel Aviv after the SNC-AXA engagement. Kamet has already invested in one Israeli start-up resident in its studio, and expects to make other investments.
Following an SNC introduction, Belgium’s ING Bank started working with in-app payments technology provider PayKey, an Israeli start-up that allows financial transactions inside messaging services. LEO Pharma, a Danish pharmaceutical multinational that focuses on skin care – with a presence in 100 countries and total assets of $5B – opened a LEO Innovation Lab in Israel, and relocated one of its executives to Tel Aviv.
It’s not just commercial corporations where SNC is active; it’s also engaged with NGOs globally, from Africa to New Zealand, to bring Israeli innovation to wherever it’s needed in the world. Together with AGRA – The Alliance for a Green Revolution in Africa – SNC is bringing top Israeli agritech start-ups to help millions of smallholder African farmers across 11 countries become sustainable businesses. The government of Togo is rolling out an innovative pest control solution after being introduced to Israeli agritech start-up BioFeed.
New Zealand’s Fonterra Co-operative Group, the world’s largest farming cooperative and the world’s largest processor of dairy products, has made several trips to Israel to meet with Agritech start-ups, with specific interest in pasture management and irrigation tech. The Milwaukee Water Council has earmarked funds for Israeli water tech start-ups that can help Wisconsin with its endemic water problems. SNC is working with the Association of Healthcare Providers India (AHPI) to bring cutting-edge Israeli digital health start-ups to tackle some of India’s most pressing challenges.
A new hub for Israeli innovation
Start-Up Nation Central doesn’t take a cut of any deals that follow from its work. The tech non-profit is funded mainly by hedge fund titan and philanthropist Paul Singer.
“Making money is not our goal. SNC's goal is to connect solutions to the problems,” says Kandel. “We’re objective, we source start-ups that can actually solve the challenges corporations are looking to solve.”
Kandel says SNC’s focus is now on balancing supply and demand for Israeli innovation – finding the right formulas for foreign corporates to engage with Israel’s tech economy on the one hand, while expanding that economy’s pool of human capital and reach throughout Israel.
The NGO now hopes to focus its various activities in its new headquarters, a five-story glass building on Tel Aviv’s historic Lilienblum Street. The building, "L28," is meant to provide a more steady home – the NGO has been operating out of co-working spaces for several years – for its growing activities and growing staff, including a large data research team which monitors the ecosystem, produces regular reports, and sources recommendation lists for corporate engagements.
“This building is not your old Israel. It is what Israel is now. It is Israel’s future,” says Kassel, who personally oversaw the building’s transformation into a new hub for the Israeli innovation and entrepreneurial ecosystem. “Our engagements are extraordinarily successful,” says Kassel. “Every time we bring a delegation to Israel, something good happens.”
Increasing Global Connectivity to Israeli Innovation
While most of SNC’s work with multinationals is confidential – discretion is a necessary element for clients who come to SNC with their biggest pain points and innovation needs – some success stories have recently come to public fruition.
Examples include AXA, a French multinational insurance firm with over 100 million customers worldwide; American International Group, Inc. (AIG), an insurer with about $500 billion in assets; Merck, the German pharmaceutical and chemicals giant; carmaker Daimler Mercedes-Benz; AB InBev, the world’s largest beverage and brewing company; and Haier Group, China’s largest appliance maker. The latter recently opened an Israeli innovation center – its first outside of China – to focus on finding Israeli innovations in sensor technology, materials, IoT, smart homes and energy.
The SAR Group, an Indian conglomerate, is rolling out the smart home solutions of a joint Jewish-Arab start-up from Haifa called MindoLife after being introduced by SNC. It took SAR Group President Rakesh Malhotra only 15 minutes into the meeting with MindoLife to schedule a follow-up. It was MindoLife’s first big customer, and their first big breakthrough – they now have 80 million homes connected in India. Looking ahead, SAR and MindoLife are working on a battery system that will provide electricity and internet to off-grid homes in India.