Tech Nation: Israel's Tech Sector Irked by New Rules on Work Visas

OrthoSpace raises $7 million; Carlos Slim praises Israel; New seed-stage fund in town.

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A high-tech office in Nazareth.
A high-tech office in Nazareth.Credit: Ofer Vaknin

Israel's Tech sector irked by new rules on work visas

Israel’s high-tech industry is angry over new rules that require people visiting Israel even for a short time as consultants to apply for a work visa, saying the move will add another layer of needless bureaucracy. The new rules were first reported by TheMarker last week and include employees working overseas for Israeli companies. “Most of the people whose expertise is needed in Israel have options outside Israel. If we increase the burden of coming to Israel, they won’t come,” said Eden Shochat, a partner in the venture capital fund Aleph. “It doesn’t make any sense that a rule like this is being imposed on high-tech,” added Erez Tsur, chairman of the trade association Israel Advanced Technology Industries. “If the rules are imposed the number of visitors will drop sharply. It’s a disaster for an industry that doesn’t operate in a vacuum and needs to interact with experts overseas.” (Eliran Rubin)

OrthoSpace raises $7 million for orthopedic implant system

OrthoSpace, whose biodegradable balloon system is used to help patients with rotator cuffs deemed irreparable, says it has raised $7 million in a financing round led by Johnson & Johnson’s venture capital arm. HealthpointCapital, Smith & Nephew and Triventures participated in the round. The funds will be used to support a study needed to get U.S. Food and Drug Administration approval for the company’s InSpace implant technology and expand its operations in Europe, South America and Asia. InSpace is marketed in Europe, Israel, Russia and Hong Kong, where 10,000 balloons have been implanted. InSpace is indicated for patients who suffer from a rotator cuff injury; it reduces shoulder pain and improves the range of motion. The procedure can be performed in an outpatient setting. Founded in 2009 and based in Caesarea, OrthoSpace has raised $15 million in two fundraising rounds, according to the website CrunchBase. (TheMarker Staff)

Mexico’s Carlos Slim cites Israel as rising tech power

Billionaire Carlos Slim, Mexico’s richest person, has cited Israel as an up-and-coming high-tech power that presents a risk to America’s leadership in the industry. “You are the leaders in technology, but there are other countries moving there China, Israel and everyone wants to improve,” Slim said in an interview with Bloomberg News. “I think that is a main issue.” Slim was using the tech challenge as an example of how U.S. President-elect Donald Trump is focusing on the wrong issues and would damage the U.S. economy by rolling back trade agreements with Mexico. “I would be more worried if I were an American,” Slim said. “If you are going to close the economy, it is bad. He has the risk to lose the international leadership of the United States." Israeli officials have expressed optimism that Trump’s hostility to world trade would have no impact on Israel because Israeli exports don’t threaten American jobs. (TheMarker Staff)

Three Genesis Partners vets forming new seed-stage fund

Three senior members of the investment team at the Israeli venture capital fund Genesis Partners are forming an early-stage fund of their own called F2 Capital. Founded by Genesis founding partner Eddy Shalev, Jonathan Saacks and Barak Rabinowitz, F2 is in the process of raising $50 million for its first fund that will invest in “frontier tech” such as drones, satellite technology, augmented reality and virtual reality. Meanwhile, it has taken over management of a Genesis accelerator program called the Junction that connects entrepreneurs with big enterprise companies. The firm maintains an option to invest more in later rounds. F2’s investors are mostly family funds based in Israel, the United States and Australia, Rabinowitz told the technology website TechCrunch last week. F2 was formed after Genesis failed to raise $125 million for what was supposed to be its fifth fund. Formed in 1996, Genesis has managed $620 million and invested in 100 companies over the years. (Eliran Rubin and Ruti Levy)

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