- The Fung Global Retail & Technology team traveled to Israel to meet with local startups that are disrupting the retail space and to gain a deeper understanding of how multinational companies operate within Israel’s booming technology ecosystem.
- Israel has been known for several years as “Silicon Valley II”—and for good reason. The country invests 4.4% of its GDP into research and development (the highest R&D investment rate in the world), and 30% of that is channeled through its universities. Since 1980, more than 250 Israeli companies have gone public on the tech-focused Nasdaq Stock Exchange. After the US and China, Israel is the most represented country on the Nasdaq.
- In recent years, multinational companies looking to establish an innovation hub have increasingly chosen to build in Israel. More than 250 global companies, including 80 Fortune 500 companies, have R&D labs in Israel today. During our visit, we met with executives from Kimberly-Clark, Sears, Coca-Cola and NCR.
- There are several modes of opportunity to engage in the Israeli ecosystem through venture capital funds, micro-funds and crowdsourced funding and, for multinational companies, through factories, R&D centers and/or software houses. Some of Israel’s technology strengths include enterprise software, cloud technologies, virtualization, hardware and cybersecurity.
- Kimberly-Clark’s Digital Innovation Lab (D’Lab) has offices in the US, Singapore and Israel. Through the lab, the company engages with investors, startups, technology companies and the academic community to bring new ideas to the consumer goods category. The company collaborates with, partners with and acquires other companies, but does not invest in them in order to avoid shared intellectual property.
- Some multinationals have built green field operations (where a parent company builds its operations in a foreign country from the ground up) in Israel, while others have acquired smaller companies to build upon. For example, Hewlett-Packard has eight R&D facilities in Israel, seven of which evolved from buyouts.
- The startup companies we met with in Israel are engaged in artificial intelligence, supply chain management, virtualization, data analytics, market intelligence services, image recognition, on-demand robotics and product optimization.
Download the full report as pdf here.
The Fung Global Retail & Technology team traveled to Israel to meet with startups that are disrupting the retail space and to gain a deeper understanding of how multinational companies operate within Israel’s booming technology ecosystem.
In recent years, multinationals looking to establish an innovation hub have increasingly chosen to build a presence in Israel. More than 250 global companies, including 80 Fortune 500 companies, have R&D labs in Israel today. Two-thirds of these companies are American tech giants such as Facebook and Apple, but the number of Chinese and South Korean players is increasing and already includes Huawei and Samsung.
Since 1980, more than 250 Israeli companies have gone public on the tech-focused Nasdaq Stock Exchange. After the US and China, Israel is the most represented country on the Nasdaq.
We traveled throughout Israel to gain a deeper understanding of how these multinationals operate within Israel’s booming technology ecosystem, and met with local executives from Kimberly-Clark, Sears, Coca-Cola and NCR.
Kimberly-Clark Digital Innovation Lab: Crowdsourced Solutions for Consumer Goods Product Innovation
We met with the director of Kimberly-Clark’s Digital Innovation Lab (D’Lab) at the company’s WeWork office space. The director, who previously played an instrumental role in establishing AT&T’s Innovation Center in Israel, is the sole member of the D’Lab team in Israel. Since introducing D’Lab in 2014, Kimberly-Clark has established an innovation footprint across the US, Israel and Singapore.
D’Lab is part of the company’s global initiative to crowdsource digital solutions. Kimberly-Clark’s goals with the initiative are to add value over existing products, add new product channels and improve the consumer experience. Kimberly-Clark likes the flexibility of Israeli entrepreneurs and their willingness to adjust a solution in order to find the proper fit. “The unprecedented rate of consumer change driven by disruptive technologies calls for relentless innovation,” the director told us.
D’Lab engages with investors, startups, technology companies and the academic community to bring new ideas to the consumer goods category. The company collaborates with, partners with and acquires other companies, but it does not invest in them, in order to avoid shared intellectual property.
Recently, the company hosted a hackathon competition focusing on baby and childcare product innovation. Eleven startups participated, and Kimberly-Clark selected six teams to collaborate with various of its brands on pilot programs.
During the conversation, the question “Why Israel?” came up. Kimberly-Clark’s director noted that the country invests 4.4% of its GDP into R&D (the highest rate in the world), and that 30% of that is channeled through the country’s universities. As a result, Tel Aviv University, the Weizmann Institute of Science and the Technion are among the top 10 patent applicants in the US. The director also cited Israel’s mandatory military service as a crucial driver of its vibrant startup scene.
In addition, the D’Lab director said that operating in Israel requires only a third of the initial investment to realize the same gains compared with other countries. These factors have created an ecosystem of vast talent and fast development that Kimberly-Clark found appealing.
Sears Israel: Creating Innovative E-Commerce Experiences
Sears Israel is a subsidiary of Sears Holdings that focuses on creating innovative e-commerce experiences. We met with an innovation manager at Sears Israel, who discussed how some multinationals build green field operations (where a parent company builds its operations in a foreign country from the ground up), while others acquire smaller companies that they then build upon. For example, Hewlett-Packard has eight R&D facilities in Israel, seven of which evolved from buyouts.
Sears acquired an Israel-based social commerce company eight years ago and has built the team from 10 people to 150 people, who focus on product strategy and R&D. The team developed Shopyourway.com, the loyalty/reward website of Sears and Kmart.
The innovation team presents Sears management with ideas on a monthly basis. Sears Israel also works with Sears’s partners. For example, the team is currently working with Kenmore (which provides appliances to Sears) to develop a loyalty mechanism that is similar to Amazon’s Dash Button.
Coca-Cola’s Bridge Accelerator Program: Internal Participation and Mentorship Is Key for Development
The Bridge by Coca-Cola is a seven-month accelerator program for startups. The accelerator identifies and supports startups that match the needs of Coca-Cola. The program’s five core themes are consumer engagement, consumer retail, supply chain, marketing innovation, and health and wellness.
We met with the cofounder and manager of The Bridge, who started the conversation by discussing the importance of working with internal business divisions and customers to understand the challenges of the business before beginning the program and choosing the cohort. He also stressed the importance of internal participation during the development and piloting stages. To elevate internal participation in The Bridge, Coca-Cola executives have invested capital in the program, the manager said, noting that “now they are invested and want to be part of the startup-filtering process and engage with the companies.”
The manager said that many startups are missing the brand-storytelling component. “They are able to raise the money, [but] then decline because they aren’t good storytellers,” he said. The Bridge provides targeted commercial guidance from an enterprise perspective. Startups are given in-depth marketing and negotiation training from Coca-Cola/Turner, and given access to internal and external business mentors.
No equity financial investment is required and startups maintain ownership of their intellectual property. The Bridge seeks to gain first-mover advantage through the development of strong relationships with innovative software technology startups by supporting and facilitating their path to commercialization. So far, The Bridge has conducted 90 pilots and signed 25 license agreements, including four global license agreements.
NCR Innovation Center: Using Israeli Startups to Provide Software Solutions for Global Retailers
On our trip, we also traveled to the city of Ra’anana to visit NCR’s Innovation Center. NCR is an American company that makes computer hardware, software and electronics that facilitate point-of-sale transactions. We met with NCR’s regional VP of sales and Software Innovation Site manager, who said that NCR was attracted to Israel because of the collaborative mentality in the country’s business sector and because it is home to a large number of R&D centers.
In 2012, NCR acquired Israel-based Retalix, a leading provider of software solutions for retail companies. Since then, NCR has added more than 200 new employees and now has a workforce of more than 1,000 in Israel.
The company is working with local partners to further develop its NCR Retail ONE commerce hub. The commerce hub (announced in June 2015) unites an open ecosystem of retail applications and data with an omnichannel software platform. Essentially, NCR has created a platform similar to the Apple App Store: it enables retailers to work with technology companies that are approved by NCR.
The open nature of the new system allows retailers to differentiate their businesses in an increasingly competitive retail environment, using existing assets. NCR’s local retail solution manager commented that “outsourcing makes more sense for companies like Walmart that face declining IT budgets.” The new commerce hub helps retailers get products to market faster and accelerate innovation by breaking down technology silos.
Crowdfunding Platform OurCrowd: Increasing Foreign Investment Opportunity in Israel
Our team also visited the office of OurCrowd, an equity crowdfunding platform built to enable accredited investors to provide venture capital funding for startups. The Jerusalem-based crowdfunding platform has a global network of 15,000 investors and has helped facilitate $300 million in investments to 100 startups since it was founded in 2013.
OurCrowd operates much like a venture capital firm, vetting deals and investing in companies alongside other investors. It selects startups to back, invests its own capital and provides the young companies with access to its global network of investors. OurCrowd is trying to stay ahead of the pack by assigning industry experts as mentors to the startups and by taking board seats at its portfolio companies.
The platform has helped fulfill the growing demand for foreign investment in Israel. The cofounder and CEO said the majority of OurCrowd investments come from outside Israel. OurCrowd also works with major corporations to source startups. It is currently working with Honda to source startups that are relevant to the automaker.
During our trip, we also met with several startup companies that are disrupting the retail industry. The teams we met with are engaged in artificial intelligence, supply chain management, virtualization, data analytics, market intelligence services, image recognition, on-demand robotics and product optimization. About 80% of the companies we met with were either based or founded in Israel. Below, we provide insights on some of the standout companies we met with during our trip.
Sector: Analytics Notable
Clients: Keter, SodaStream, Brita
Wizer is a consumer research platform that uses artificial intelligence to analyze business questions and provide fast, affordable and in-depth market insights. The platform simplifies the process of running professional market research surveys, according to the company’s cofounder, Idan Geva.
With Wizer, the client poses a research question and defines goals. Then, Wizer’s algorithm builds a research plan, selecting an optimized questionnaire that fields responses from a selected group. The platform pulls appropriate questions from hundreds that have already been written by human researchers, and the questions are auto-assembled into an online questionnaire of 25–30 questions. The system ensures that there is no writing required by the client’s marketing team.
So, clients are able to automatically generate an online questionnaire by answering the platform’s questions, and they receive results within 48 hours. Furthermore, Wizer’s algorithm analyzes the survey results and their statistical significance. The startup is backed by market researcher Nielsen’s incubator in Israel.
Sector: Supply chain, logistics
Notable Clients: N/A
Freightos is attempting to make global shipping smoother by offering the first online international freight marketplace. The Freightos marketplace enables logistics companies to manage contracts, and automate and manage the quote and sales process, from their own website. With a mission to bring real-time quotes to the freight industry, Freightos might best be described as a Kayak or Expedia for international shippers.
Both individual users and freight forwarders can use the platform to search for and filter shipping options by price, time, route, fees involved or type of transportation. The Freightos system replaces the old way of doing business, which relied on fax machines and Excel spreadsheets.
Freight vendors on the Freightos network can easily share rates and tariffs, allowing their salespeople, agents and customers to instantly generate even the most complex freight quotes in seconds, right from their Internet browser. Freightos says that it is able to offer more than 200 million freight pricing data points, and that it has established the largest freight rate database in existence.
The Freightos team, led by CEO Zvi Schreiber, has a strong track record of creating innovative technologies, some of which have been acquired by IBM and GE.
Sector: Fashion technology
Product Stage: Released
Notable Clients: N/A
EZface provides a virtualization solution to enhance the makeup shopping experience. Consumers can virtually “try on” cosmetics, get personalized recommendations and even solicit advice from friends via the EZface app. The virtual testing platform converts digital photographs into a “virtual mirror” through which users can visualize how they would actually look while wearing various makeup products.
The company’s virtualization software decodes the product’s attributes (color value, effect, coverage, etc.), analyzes the user’s pigmentation with automatic facial-detection technology, and blends the product’s attributes with the pigmentation in the relevant makeup areas to ensure an accurate and realistic simulation.
Founded in 2000, EZface has been successfully incorporated into numerous websites and in-store kiosks worldwide, including by Walmart and L’Oréal. According to Cofounder Rami Orpaz, EZface was the first company to experiment with providing a virtual makeup experience. Now there are several beauty startups working on virtual mirrors, including ModiFace and YouCam Makeup, and L’Oréal Paris has introduced a new virtual makeup tester app called Makeup Genius.
Sector: Supply chain, inventory management, loss prevention
Notable Clients: Global resellers
RFKeeper is a provider of supply chain management and loss prevention solutions that use RFID tags. The company uses patent-pending RFID tags to provide retail chains with inventory management, loss prevention and supply chain visibility solutions that benefit both the supply chain manager and the retailer.
With the company’s system, retail products are assigned RFID tags that transmit all information throughout the supply chain to the cloud. This provides the supply chain manager with improved supply chain visibility and traceability for loss prevention.
RFKeeper’s end-to-end solutions enable retail chains to improve inventory accuracy, reduce shrinkage and increase shopper loyalty. The plug-and-play solutions can be deployed within hours, require minimal training and changes to retailers’ current store processes, and rely on a small RFKNet Wi-Fi router for configuration within the cloud.
Sector: Big data analytics, supply chain analytics
Notable Clients: Armani Exchange, Coca-Cola, L’Oréal, Philip Morris, Saks Fifth Avenue, Texas Instruments
Panorama provides analytics and self-service features such as collaborative business intelligence, contextual data discovery and process automation for business users. The company’s solutions provide users with personalized, intuitive and interactive analytics that are delivered through a highly visual and understandable infographic format. The dashboard includes KPI alerts, and lets users create collaborative “workboards” and visual presentations to provide better context as they put together ad-hoc business teams to address internal issues.
The company was founded in 1993 and sold its OLAP technology to Microsoft in 1996. Panorama supports more than 1,600 customers worldwide in industries such as financial services, manufacturing, retail, healthcare and telecommunications.
Sector: Supply chain
Notable Clients: N/A
Wave connects all members of the supply chain to a decentralized network and allows them to directly exchange documents. Wave’s application manages ownership of documents on the blockchain, eliminating disputes, forgeries and risks. The peer-to-peer network connects all carriers, banks, forwarders, traders and other parties of the international trading supply chain. Using decentralized technologies, all communication between these parties is direct and does not pass through a specific central entity.
Currently, the supply chain process requires a bill of lading, or document issued by a carrier to acknowledge receipt of cargo for shipment. Bills of lading are one of three crucial documents used in international trade to ensure that exporters receive payment and importers receive merchandise. Wave’s solution provides an innovative method for exchanging trade documents that is cost-effective, secure and designed to integrate with current workflows. The startup is backed by the Tel Aviv–based Barclays Accelerator.
Company: Market Beyond
Sector: Analytics Product
Stage: Released Notable
Clients: Keter, Rubbermaid
Market Beyond is a market intelligence services company that provides online retailers with insights into the customer purchase journey and their competitors. The company lets users tap into competitors’ KPIs in order to get information about sales, conversions, average selling price across products, effective marketing channels and more. The company facilitates the gathering of big data shopping information from millions of users worldwide, allowing online sellers to ask simple questions that can unveil easy steps to boost performance, such as “What is the competition selling?” and “What new products are trending?”
Company: Consumer Physics
Consumer Physics developed a handheld molecular scanner, the SciO, that allows consumers and businesses to learn about the makeup of materials in products. Users scan foods and other materials (such as vitamins and medicines) using the handheld device, and the API gathers data and offers a deep molecular analysis.
The SCiO sensor pairs with SCiO smartphone apps and connects to a cloud-based database of material fingerprints. Consumer Physics offers businesses and third-party developers a platform that enables them to design their own molecular-sensing models and mobile applications for personal and commercial use.
Sector: Analytics, information technology
Notable Clients: Coca-Cola, Heineken, Nestlé
The Trax platform is powered by image recognition technology that provides retailers with deep insights into what is happening in their store aisles. Shelf images are taken with mobile devices, fixed cameras or robots, and then analyzed in the Trax cloud. The system then sends real-time, actionable insights to store staff via their mobile devices. Online dashboards are available for business teams through Trax’s business intelligence platform.
Trax provides retailers with recommendations for improving sales, such as how to change the placement of products relative to their environment in the store. Retailers turn the data and insights into broader market intelligence and highly accurate trend predictions that shine a light on new ways to improve the in-store customer experience. The company has received $78 million in total financing to date.
Company: CommonSense Robotics
Sector: Supply chain
Notable Clients: N/A
CommonSense Robotics is building the first on-demand, robotic, in-the-city fulfillment solution for last-mile delivery. The solution enables one-hour delivery while reducing operational costs. Cofounder and CEO Elram Goren described the company’s solutions as “micro-fulfillment centers.” The company was established in 2015 and is a graduate of the Microsoft Accelerator program. CommonSense Robotics’ solution is currently in the demo stage, with a live beta version set to launch in the third quarter of 2017, according to Goren.
Sector: Supply chain
Product Stage: Released
Notable Clients: GE Digital, Siemens
Plataine provides a production optimization solution for manufacturers that produce composite components for the transportation, furniture, aerospace and apparel industries. Plataine’s solution is a tracking-as-a-service (TaaS) solution that bridges the gap between CAD, ERP and the production floor, effectively enabling manufacturers to digitalize the production process.
The solution allows manufacturers to schedule production tasks; track raw materials, kits and tools throughout the plant; optimally select raw materials from inventory; dynamically assign product orders to available materials; and more. The software is designed to make manufacturers more competitive by helping them improve materials utilization and productivity, control quality, and shorten manufacturing cycles to ensure on-time delivery of products to customers and create a more dynamic manufacturing environment.
- On Monday, February 13, the Fung Global Retail & Technology team met with several Israel-based startups as we kicked off a four-day technology innovation tour of Israel.
- The startups are focused on improving the customer experience through technology solutions for self-checkout, image recognition and digital displays.
- The companies we met with all focus on making the in-store shopping experience more seamless for consumers. They aim to eliminate the hassle of waiting in line to check out, increase the chances that a product a consumer wants will be in stock and enable retailers to use data analytics to promote certain products on in-store displays.
Israeli Startup Presentations
On the first day of our tour, we heard from a handful of Israeli companies including:
- Shopic, Dan Bendler, CEO
- Kannita, Aviv Levin, Co-Founder and CTO
- Syte, Ofer Fryman, CEO
- CheckOut Apps, Roy Dror, Co-Founder and COO
- Ogmint, David BenDavid, Co-Founder
The startups we met with are focused on creating solutions for self-checkout, image recognition and digital displays. Below, we share the highlights from our meetings with these startups.
Consumers Can Now Use Shopic for Self-Checkout, Eliminating the Need to Wait in Line
Shopic is a shopping app that enables users to skip the checkout line in brick-and-mortar stores by letting them purchase items directly through the app. Users scan the barcodes of their items and Shopic’s payment system lets them safely upload their payment method and make the purchase on a standard approved by the PCI Security Standards Council. Shopic is currently using its self-pay option with major retailers such as Toys“R”Us.
Shopic has also collaborated with Tyco on a shopping app function that enables consumers to remove the security sensor on an item of clothing at the point of purchase—without requiring any assistance from an in-store staff member.
According to research from Motorola, one out of ten customers will walk out of a store when faced with long checkout lines. The Shopic app helps eliminate the need to wait in a checkout line, thereby decreasing cart abandonment and increasing sales. Forbes suggests that Shopic has the potential to be the top, all-powerful shopping app, and CIOReview magazine named Shopic one of the 20 most promising retail technology solution providers.
Image Recognition Is Helping Retailers Better Manage Inventory Levels
Kannita uses image recognition technology to provide real-time inventory visibility and tracking. The company’s “virtual sales assistant” provides real-time, actionable insights on shelf contents and consumer behavior. The platform uses a camera on the front of a shelf in conjunction with image recognition to present data to a store’s sales team. The company’s solution helps retailers by providing alerts when items are low or out of stock.
Kannita supports brick-and-mortar retailers by measuring conversion rates and product performance by location, which ultimately helps stores maximize their return on investment. The company is currently working with Coca-Cola.
Syte also uses image recognition, but in conjunction with e-commerce. The company is developing next-generation machine-learning technologies focused on image recognition and prediction that will help users find the items they are looking for online. The platform is designed to give consumers the ability to find anything they want to buy simply by hovering over an online image. For example, if a product is out of stock, Syte can help the shopper locate a similar style. The company has spent more than two years developing its fashion algorithm to identify items that most closely match style searches. Syte is also working with point-and-click technology to find the best matches for objects and the best prices across the web. The company’s CEO, Ofer Fryman, said that Syte is also launching an “As seen on me” feature on its app that will encourage users to upload blogged photos of their outfits.
Technology Tools Help Stores Use Real-Time Data to Drive Sales
CheckOut-Apps is pioneering a digital fashion discovery platform that bridges the online and offline display models. The company uses analytics from customer experiences and preferences from both brick-and-mortar stores and online sales in order to update the digital signs in stores. It allows retailers to change their display ads based on a particular time of day or based on real-time online sales of a particular product. CheckOut-Apps was founded on the idea that retail stores have changed very little over time. The company aims to completely upgrade the offline retail experience by bringing old-fashioned shopping into the digital age.
Ogmint’s solutions will allow online retailers to scan and build their own online virtual-reality (VR) marketplaces. The company’s current software package contains all the components necessary to enable consumers to virtually try on watches and accessories in real time. The solutions are made to be incorporated into both monobrand and multibrand shops, as well as public environments such as airports, hotels and event sites. Founder David BenDavid said that VR is the vision of the future, and that very few models have VR products. Today, consumers may not feel the need for VR technology, but brands are expected to spend $30 billion on VR in 2020, and BenDavid believes a lot of that spending will be on content.
- On Tuesday, February 14, the Fung Global Retail & Technology team met with several Israel-based startups as we continued our four-day technology innovation tour of Israel.
- Deborah Weinswig, Managing Director of Fung Global Retail & Technology, gave a presentation titled “Who Is the Connected Athlete?” at the LeAD Sports Technology Accelerator Launch. The accelerator is a partnership between OurCrowd and the Adi Dassler International Family Office (Dassler was the founder of Adidas).
- We met with executives from EFI, a leader in digital design. Transitioning from 2D to 3D is speeding up the apparel design process by reducing the number of physical prototypes required and giving designers more flexibility earlier in the process.
- We also met with leaders from a number of startups that are creating solutions that help retailers connect with consumers. These companies are focused on marketplaces, social commerce and analytics for understanding what happens both in the store and after a purchase.
- The Fung Global Retail & Technology team will continue to report on technology innovations and thought leadership insights throughout the week. The team is also participating in the 2017 OurCrowd Global Investor Summit, where Weinswig will speak on corporate innovation.
On the second day of our tour, we heard from executives from a number of Israeli companies and accelerators, including:
- Liron Slonimsky, Founder and CEO, Awear Solutions
- Dima Klichinsky, Co-Founder and VP of Sales, ADeens
- Moti Levy, Founder, COO and CRO, Mobilibuy
- Kfir Shapira, CEO, DSM Tool
- Dov Yarkoni, Chief Investment Officer, Nielsen Innovate
- Dan Baruchi, CEO, and Mali Cohen Denzinger, VP Marketing, Personali
- Horst Bente, CEO, Adi Dassler International Family Office
- Aviv Shapira, Senior Director of Operations and Production, Intel Sports Group, Intel
- Asaf Landau, General Manager, EFI
- Dana Aroch Soffer, Marketing Director, EFI
- Guy Alroy, VP Product, EFI
The startup leaders we met with are focused on creating solutions for marketplaces and social commerce and analytics that help companies understand what happens both in the store and after a purchase. Below, we share highlights from our meetings with these company leaders.
“Who Is The Connected Athlete?”
OurCrowd, an equity crowdfunding company, launched a partnership with LeAD, a sports tech accelerator backed by the Adi Dassler International Family Office. OurCrowd and LeAD celebrated the launch of their partnership on Tuesday evening in Tel Aviv, along with more than 100 attendees.
Horst Bente, CEO of Adi Dassler International Family Office, presented LeAD’s mission and vision: to discover high-potential innovation in sports-related products and services on a worldwide scale. Bente, grandson of Adidas founder Adi Dassler, said he “would
like to make the legacy of [his grandfather] come back to life.” He said his family’s wish is to create a global sports accelerator. LeAD’s first accelerator launch will be in December in Berlin.
Fung Global Retail & Technology Managing Director Deborah Weinswig gave a presentation titled “Who Is the Connected Athlete?” at the launch event. She noted that more than $1 billion was invested in sports technology last year and explained that future sports
brands will offer consumers more than just a product—they will create a sports ecosystem. Notable existing ecosystems include Under Armour’s fitness community, which includes 165 million users served by the company’s various apps, and Adidas’s miCoach wearable technology system. Under Armour’s network was built through acquisitions; the company paid more than $700 million for the MapMyFitness, MyFitnessPal and Endomondo apps, which interact with its UA Record app.
The connected athlete will most likely be found in China, Weinswig noted. In 2016, 58.2 million Chinese consumers used fitness and nutrition apps, and this number is expected to grow at a CAGR of 9.5% from 2017 to 2021. China is also developing its own fitness apps, such as Keep and Codoon.
Weinswig also said that smartwatches and fitness bands dominate today’s wearables market, which is expected to grow from $15 billion in value in 2016 to $21 billion in 2017, according to the CTA. IDC expects smart clothing and accessories’ share of the wearables market to grow from 2.2% in 2016 to 7.3% by 2020. Today’s wearables offer real-time coaching (as exemplified by Oakley’s Radar Pace) and enhance performance (as exemplified by Halo Sport’s headphones, Vi’s artificial intelligence personal trainer and the IBM Watson–enabled technology offered by Under Armour).
Connectivity and gamification enable healthy competition by using elements from video games such as badges, levels, prizes and leader boards. Fitness bands track progress versus goals and allow the wearer to compete with and challenge friends or strangers. And the Peloton cycle enables the rider to access a wide variety of workouts, participate in live and on-demand rides and classes, and share workouts to social media.
Yet many wearables still end up in the sock drawer. Fitbit reported a 70% churn in 12 months in its IPO filing and Gartner reported a 29% abandonment rate for smartwatches and a 30% rate for fitness trackers. The reasons consumers cite for abandoning these devices include not finding the device useful, getting bored with it, breakage or it being aesthetically unappealing.
Technology has also enabled the rise of the professional video gamer, or “cyber athlete.” Global revenue for competitive gaming, or e-sports, is estimated to have hit $890 million in 2016, up 19% from 2015, according to SuperData Research. Asia leads the sector, comprising about 37% of the global market, and e-sports participants skew heavily male.
Virtual reality (VR) technology has enabled a spectator experience that is almost better than being at a sports event in person. VR provides new ways to reach players and fans who are viewing sports outside stadiums, arenas and pitches.
In addition, stadiums are becoming connected in order to enhance the viewing experience. Connected devices and big data are used to transform insights and offer geopersonalized experiences. Viewers can use such technology to order food to be delivered to their seats and to create replays and view real-time footage on smartphones. Vendors can also use the technology to manage crowd flow and stock items more intelligently.
Replay Technologies also presented its mixed-reality solution at the lead sports tech accelerator launch which was most recently highlighted at the Super Bowl and the Olympics. Replay was acquired by Intel in March 2016 for $170 million. Replay provides a “freeD” video format that uses high-resolution cameras and intense graphics to allow viewers to experience sporting events from any point of view. Aviv Shapira, co-founder of Replay said that freeD has the power to redefine how consumers watch sports. With very few surrounding details, the company announced that it is launching Macore, which “will enhance and enrich the human experience by extending our presence beyond the known limits of time and space.”
Digital Design, Marketplaces, Social Commerce and Brand Analytics
We also met with executives from EFI, a leader in digital design, as well as with leaders from startups that focus on technology solutions to help retailers connect with consumers at nearly every stage of the purchase journey. These startups focus on marketplaces, social commerce, analytics for understanding what happens both during and after a purchase, and branding.
EFI Making Design High-Tech
EFI is using 3D digital sampling in the fashion and apparel industry. The company is taking 2D to 3D, moving design from low-tech to high-tech. EFI is working with Under Armour to provide the company with tools that allow it to collaborate directly with designers, thereby saving time and resources.
With digital design, the design process can be reduced from the average of six months from design to production to two months for a completed garment. It improves the supply chain workflow by reducing the number of required steps, such as the need to create prototypes. Another benefit is that digital design means fewer fittings are required. Finally, digital design provides flexibility, allowing for fast decision making with quick on-screen updates providing 3D, real-time results that users can see, update and manage. All of these benefits help apparel companies save time, labor and material costs.
We also met with DSM Tool, which automates the drop-shipping business by allowing manufacturers to ship goods directly to the retailer or consumer. DSM Tool defines itself as a “marketplace remarketer.” It manages the drop-shipping process and helps enable online drop-shipping. DSM Tool is a platform for clients who have eBay shops, but the service is intended for anyone who has a marketplace shop. The platform helps clients price items, and remarkets the items at a higher price. Today, DSM Tool works with approximately 1,500 eBay sellers.
Marketplaces are the next wave for brands because they offer many benefits, including low or no inventory cost, low risk and high customer satisfaction. Many traditional retailers are pursuing marketplaces as a complement to their retail strategy.
Social Commerce: Bringing the Store to the Traffic
Mobilibuy created a software platform that enables brands, retailers and distributors to create virtual stores anywhere. The company places digital screens in desired locations and converts them into storefronts. The product offering shown on the screen is modified based on the time, date and shopper profile. Consumers are able to spot and shop the product using a mobile device, and buy it. The goal is to bring the store to where the consumers are. Mobilibuy, there is no personnel, no physical store and no need to maintain stock in popular areas, where real estate can be a major expense. The company is currently working with Yahoo!, the Brooklyn Nets, the NBA, Kraft and Unilever.
Analytics: Helping to Inform Before, During and After Purchase
ADeens is using in-store digital signs to affect the customer experience. The company’s mission is to increase and optimize sales for retail and grocery chains, and it believes it is providing the vision of how stores should look in the future. ADeens uses smart, automatically generated ads that are created based on information from a retailer’s ERP system. The service automatically generates sales-pushing commercials based on such information, and it relies on developed machine-learning algorithms to launch these ads on controlled screens.
Personali is a retail technology software company focused on machine learning. Its platform predicts, in real time, a consumer’s willingness to pay, and offers different levels of incentives based on behavioral economics. For example, an incentive window will appear and offer the consumer a discount if he or she uses the offer within a certain amount of time. If the consumer is about to abandon a cart, it may offer a game. Personali is not a loyalty program; rather, it operates on a retailer’s site, unseen by the consumer. The system uses numerous parameters to draw elasticity curves of segments of what people will pay based on price—discount for conversion. The company reports that its model is helping drive conversion levels 30% higher and that those conversion rates can be reached with discounts of less than 5% on products.
Awear Solutions makes wearing clothes a customer loyalty experience by rewarding consumer behavior and continuously gathering data about an item’s usage after it leaves the store. Today, fashion brands do not know what really happens to their product after it leaves the store.
Awear created a chip that allows fashion brands to use the IoT and big data analytics to learn about and reward customer behavior post-purchase. Consumers can use Awear’s mobile app to receive rewards for wearing a purchased fashion item or accessory and to receive targeted promotion offers at specific times and locations.
Nielsen Innovate Fund, an Incubator Focused on Entrepreneurs with Access to Nielsen and Fortune 1,000 Companies
Founded in 2013, the Nielsen Innovate Fund is an early-stage incubator and investment fund focused on analytics, artificial intelligence, big data, retail, e-commerce, market research, consumer behavior, the IoT, media, VR/AR, campaign measurement, advertising and marketing. Nielsen Innovate operates an incubator under a license agreement with The Office of the Chief Scientist of Israel. The fund’s goal is to help early-stage startups become successful by providing mentoring, operational support and introductions to investors. The incubator supports entrepreneurs who possess “disruptive and opportunistic digital technology know-how” and are looking to convert ideas into projects and global businesses.
The fund provides $2 million in seed funding, with additional funds based on progress and follow-on rounds, as well as collaborative workspace, strategic guidance and administrative support.
- On Wednesday, February 15, the Fung Global Retail & Technology team attended the OurCrowd Global Investor Pre-Summit Corporate VIP Day in Jerusalem as part of our Israel technology innovation tour. OurCrowd is one of the world’s largest crowdfunding organizations, and the event focused on innovation at large corporations.
- Approximately 150 multinational and corporate partners attended the event. OurCrowd CEO Jon Medved gave opening remarks, which were followed by a presentation from Eyal Eliezer, Strategy & Marketing of Foreign Investment & Industrial Cooperation at the Ministry of Economy and Industry, Israel.
- The day also included two roundtable breakout sessions on the theme of innovation at large corporations. The first session was led by Eliron Ekstein, Programme Lead at Shell, and Gal Zellermeyer and Eyal Roash of Dropbox. The second session was led by Deborah Weinswig, Managing Director of Fung Global Retail & Technology, and Oded Meirav, Manager, GE Global Research, Israel Technology Center.
- The innovation models used by Shell and Dropbox are focused on the customer and the end product. Shell is innovating in order to survive, while Dropbox’s company DNA encourages risk taking.
- Li & Fung and GE are both more than 100 years old, and both use innovation models that encourage partnerships with startups. Li & Fung is helping to build partnership connections to keep retail healthy and GE is using partnerships to “inject life and spirit” into the company.
On February 15, we attended the OurCrowd Global Investor Pre-Summit along with more than 150 industry leaders from around the world. The theme of the day was innovation at large corporations. The event included breakout sessions focused on innovation strategies, best practices and challenges. Additionally, there was a guest presentation from Eyal Eliezer, Strategy & Marketing of Foreign Investment & Industrial Cooperation, Ministry of Economy and Industry, Israel. Eliezer provided a macro view of the Israeli startup environment.
On the third day of our tour of Israel, we heard from:
- Jon Medved, Founder and CEO, OurCrowd
- Laly David, Business Development Partner, OurCrowd
- Eyal Eliezer, Strategy & Marketing of Foreign Investment & Industrial Cooperation, Ministry of Economy and Industry, Israel
- Eliron Ekstein, Programme Lead, Shell
- Gal Zellermeyer, Dropbox
- Eyal Roash, Dropbox
- Oded Meirav, Manager, GE Global Research, Israel Technology Center
Successful Companies Take Risks
The OurCrowd Global Investor Pre-Summit opened with welcoming remarks from OurCrowd CEO and Founder Jon Medved. OurCrowd was founded in February 2013 and has raised more than $400 million for more than 110 portfolio companies. It is one of the largest crowdfunding organizations on the planet, according to Forbes. Medved advised that successful companies are those that innovate and take risks. Laly David, the head of OurCrowd’s business development efforts, pointed out that taking risks is important because change often promotes growth. Medved said that partnerships between multinational corporations and startups can foster collaborative innovation. OurCrowd has invested in companies that are creating machine-learning technology to prevent prescription errors, anti-collision systems for rental cars, and 3D video for live replay at sporting events.
Israel Is Investing in Startups and Promoting One-Stop Shop and Intellectual Property (IP) Incentives
Eyal Eliezer, of Israel’s Ministry of Economy and Industry, offered a macroeconomic perspective. He presented a “one-stop shop” solution for foreign investors considering investing in Israel. Investors receive full-service support: the government explores all of the investment processes in Israel, maps potential obstacles and creates green lanes in order to assist investors. The Ministry works with local government ministries, tax authorities and planning commissions to guide investors through the process.
The graphic below highlights how Israel is promoting IP incentives in order to retain talent.
Eliezer explained that the government’s incentives reduce the corporate tax rate to 6% from 12% for qualifying Israeli companies (located within certain areas of Israel) with consolidated revenues of more than $2.5 billion. He said that companies are showing interest in the incentives and complimented the government’s efforts in producing this competitive offer.
Roundtable Session: Innovation Models at Large Corporations
After the morning presentation, the group divided into two breakout sessions to discuss innovation models at large corporations. The discussions centered on how companies are taking risks, and the ways that they are innovating. Shell’s Programme Lead, Eliron Ekstein, and Dropbox’s Gal Zellermeyer and Eyal Roash led the first roundtable discussion and shared how their respective organizations are approaching innovation. Shell and Dropbox use different innovation models, but both companies are focused on the customer and the product.
Shell Is Innovating to Survive
Shell has more than 100,000 employees and has been working with OurCrowd on innovation for over a year. Because the energy industry is evolving, and methods of producing renewable energy are also evolving, Ekstein said that the company has to invest in new energy solutions in order to survive. Shell has approached innovation with an eye on the customer, meaning that the company is looking at consumer behavior and market behavior regarding energy consumption and the future of energy. Its innovation models include in-house, external and hybrid solutions.
Shell performed a study using internal and external partners to understand consumer transportation consumption patterns across the entire value chain. The company invested in and set up an in-house venture and also used third-party ventures to study these patterns. For Shell, this was a new, hybrid way to study and solve a problem. It led to deeper insights into same-day delivery, and allowed the company to make investments in the space.
Using external partners, the company created the FarePilot app, which helps taxi, Uber and Lyft drivers find riders faster. The app pulls data from social media and weather sites, and combines that information with other analytics. The project is currently seeking investors.
In addition, Shell used internal innovation teams to develop a car performance-tracking device that enables consumers to monitor their car’s performance via an app. The team is looking at distribution channels and at placing the device in vehicles to upsell. The three innovation models demonstrate how Shell is using different approaches and resources, both internal and external, to solve different problems.
Risk-Taking Is in the Company DNA at Dropbox
Dropbox—a much smaller organization than Shell, with 600 people in four offices across the world—takes a three-legged approach to innovation, according to Zellermeyer. First, the company only hires engineers who take risks. This is the company DNA. Its engineers think like users and solve customer problems. Second, Dropbox is heavily invested in its annual Hack Week, which is a way for employees to “turn the ideas that they’ve been dreaming up into reality.” The yearly tradition allows the company to explore how to make Dropbox better for users. Zellermeyer said that approximately 70% of the company’s ideas are conceived based on questioning how a product can be made better for either the employees themselves or for customers. Roash added that one of his ideas from the latest Hack Week was accepted and became a product, which is something he is very proud of. Finally, the company focuses on making acquisitions and bringing entrepreneurs who have great ideas to the company.
Roundtable Session: Two 100+-Year-Old Companies Encourage Innovation Through Startups
Deborah Weinswig co-led the second panel on innovation models at large corporations with Oded Meirav, Manager, GE Global Research, Israel Technology Center.
Li & Fung’s Culture Encourages Innovation
Weinswig highlighted that although Li & Fung (the parent company of Fung Global Retail & Technology) is more than 100 years old, the company’s culture continues to encourage and embrace innovation. Specifically, Fung Global Retail & Technology, the think tank arm of the organization, engages in research on emerging retail technology companies. The team helps connect startups with retailers and brands, and works with technology partners with the end goal of making retail prosperous. Fung Global Retail & Technology also hosts quarterly Breakfast with the Disruptors events, where several startups are invited to pitch their businesses to stakeholders and investors. The events are held at Li & Fung’s facilities and provide an opportunity for internal stakeholders to meet and explore collaborations with other partners.
Additionally, the company hosts internal competitions, such as The Kitchen, in which employees participate globally in brainstorming sessions to solve real-world, real-work problems such as “How can we shorten the supply chain cycle?” This helps encourage a culture of freethinking and creativity, where participants collaborate and no idea is deemed too outrageous to be considered. The company implements winning solutions and rewards those who propose them. Senior leaders attend Singularity University, which introduces them to new technologies and helps bring them along in understanding the latest industry changes and best practices.
GE Reinvents Itself with Focus on Core Competency
GE is a 125-year-old company most famous for its hardware, industrial design and jet engines. The company has had to reinvent itself again in the last nine years due to the effects of the 2008 recession and the 9/11 attacks. According to Oded Meirav, GE believes that complicated technology, such as jet engine design and robotics, is its core competency, and that the company would not be successful in commodity products or niche markets. Meirav said that GE enjoys a competitive advantage in areas where the barriers to entry are high—for example, jet engine design. Therefore, company has decided to continue to invest in its core capability, deep technology, for its future. GE has invested in a global R&D center in Israel, where it conducts research for all technology on all future products. GE also is investing in advanced manufacturing in the areas of robotics and 3D printing, and the company wants to apply this technology to the industrial world. GE Ventures is a new stand-alone corporate entity in Silicon Valley that invests $100 million a year in technology ventures.
The company’s GE Digital division was created based on the belief that hardware and data will be combined in the future. The company has launched GE Digital Israel, GE Industrial Israel and GE Global Israel, all of which are looking at innovation in Israel. Meirav said that GE believes data will generate a substantial portion of the revenue of the future. The company recognizes that it is not the only game in town, so it is partnering with startups that excel and take risks. GE has launched its own industrial IoT by partnering with 16 companies. The goal of all of these innovation efforts is to make GE more open and agile, like a startup, and to inject that spirit into the entire enterprise.
- On Thursday, February 16, the fourth and final day of our Israel innovation tour, the Fung Global Retail & Technology team attended the 2017 OurCrowd Global Investor Summit. The event’s theme was “The Future,” and approximately 4,000 business leaders from around the globe were in attendance.
- OurCrowd is one of the largest crowdfunding organizations in the world, according to Forbes. The organization has raised more than $400 million for more than 110 portfolio companies since its launch in February 2013.
- Israel continues to be a prime location for new startups and investments. The country saw $4.8 billion invested in high-tech ventures in 2016, a 120% increase from 2013. Voice recognition, digital health and agriculture tech are among the top trends driving investment.
- At the OurCrowd summit, Deborah Weinswig, Managing Director of Fung Global Retail & Technology, participated in a panel called “Wag the Elephant: Innovating at Big Companies” that included executives from Microsoft, Innogy, Dropbox and Honda.
- The Fung Global Retail & Technology team also participated in a “startup speed dating” event at the summit. We met with leaders from Jumpspeed Ventures, a Jerusalem-based venture capital fund; Freightos, a logistics company that has created an online freight quote tool; ModLi, a online marketplace for modest clothing; and Invertex, maker of an omnichannel footwear fit-scanning solution.
OurCrowd Global Investor Summit is the biggest equity crowdfunding event in the world and it featured keynote speakers who discussed innovation, technology and globalization. Held in Jerusalem, the summit was attended by more than 4,000 industry leaders, more than double the number of attendees the previous year. The major theme of the day was “The Future,” and there was also much discussion of collaboration. The event included presentations, panel sessions and one-on-one “speed dating” networking sessions. One participant affectionately referred to the summit as “networking on steroids.”
At the summit, we heard from an array of executives and leaders, including:
- Jon Medved, Founder and CEO, OurCrowd
- Laly David, Business Development Partner, OurCrowd
- Elan Zivotofsky, General Partner, OurCrowd
- Nir Barkat, Mayor of Jerusalem
- David Bleicher, CEO, Invertex
- Ari Leon Fruchter, Head of Business Development, Freightos
- Zvi Schrieber, CEO, Freightos
- Nava Brief-Fried, Co-Founder and CEO, ModLi
- Ben Wiener, Founder, Jumpspeed Ventures
- Meir Morgenstern, Site Lead, Dropbox
- Ruthy Kaidar, Chief Startups and Developer Relations Lead, Microsoft Israel
- Nick Sugimoto, Senior Program Director, Honda Silicon Valley Lab
- Inken Braunschmidt, Chief Innovation Officer, Innogy
OurCrowd Grows from $100 Million to $400 Million in Three Years
The summit opened with a welcome address from OurCrowd Founder and CEO Jon Medved, who highlighted the global nature of the event. Medved said an estimated 82 countries were represented at the summit, along with 300 startup companies, 250 venture capitalists, 200 multinationals, 170 visiting journalists and 6,000 registered attendees (an estimated 4,000 actually attended).
OurCrowd was founded in February 2013, and Medved noted that it has raised more than $400 million for more than 110 portfolio companies since its inception.
Jerusalem: A Growing City Where Everyone Is Welcome
Medved then introduced Jerusalem Mayor Nir Barkat, who spoke about his life as an entrepreneur and about Jerusalem. He described Jerusalem as a city where everyone is welcome. “There are no guests and no hosts. It is not just the past, it is the future,” he said. According to Barkat, tourism and health/life sciences are two industries that are growing in Jerusalem. He said that four years ago, there were 250 technology companies in Jerusalem, but today there are 600. He also said that there are great opportunities in Jerusalem for young companies that want to locate and grow their operations in the city.
Medved echoed the mayor’s comments about Jerusalem being ripe for investment, and presented two contrasting slides of the venture capital picture that illustrated how Israel has thrived in a declining market. “Worldwide venture capital activity declined 24% and venture-backed exits declined 26% year over year,” Medved said. He then contrasted that global trend with the trend in Israel, where high-tech capital grew by 120% from 2013 to 2016.
Why is Israel receiving so much investment? Medved suggested it is partially because the country’s entrepreneurs focus on difficult, high-tech areas such as machine-learning algorithms and drone technology. He added that 60% of military drones come from Israel, and said the country leads the world in autonomous vehicle technology. Sports technology and agricultural technology are also core strengths.
Top 10 Tech Trends that Will Change Everything
Elan Zivotofsky, OurCrowd General Partner and Laly David, OurCrowd Business Development Partner, then discussed the top 10 tech trends that OurCrowd has identified:
- Artificial intelligence and machine learning go mainstream: Faster processing, cloud computing and “training machines” are all driving true revolution. Medved advised that companies should focus on applications that solve real problems.
- VR and AR become a critical business tool: These technologies are no longer just for entertainment; they have wide application.
- Voice-driven apps filter out the voice: These are the primary mode of human-machine communication. Cleaning the signal is key. The missing link is hearing.
- Ag tech disrupts the world’s oldest industry: Younger farmers are more open to tech. The industry is undergoing mass consolidation.
- Industrial and agricultural drones take off: Consumer applications may be fun, but mining, oil, gas exploration and crop protection are among the areas to watch in drone development.
- Digital revolutionizes healthcare: Digital technology is revolutionizing traditional care approaches and old data for new applications. Big data, computer vision and machine learning are drivers.
- Blockchain applications finally take hold: The blockchain is no longer just for bitcoin; the sharing economy, logistics and data security will all use blockchain technology.
- Space tech: Governments no longer dominate the industry, and cost reductions drive funding.
- Infrastructure becomes critical: Cyber protection is as important as ever. Security is now about protecting all digital things. Israel remains in the lead.
- Autonomous driving picks up speed: With autonomous cars, it is just a matter of time before the core technology becomes mature. Israel is emerging as a hub of innovation.
Panel: “Wag the Elephant: Innovating at Big Companies”
Later in the day, Deborah Weinswig participated in a panel discussion titled “Wag the Elephant: Innovating at Big Companies,” which focused on partnerships, corporate culture, communication, branding and working with startups. Laly David, Business Development Lead at OurCrowd, moderated the panel, which included Ruthy Kaidar, Chief Startups and Developer Relations Lead, Microsoft Israel; Inken Braunschmidt, Chief Innovation Officer, Innogy; Nick Sugimoto, Senior Program Director, Honda Silicon Valley Lab; and Meir Morgenstern, Site Lead, Dropbox. Highlights of the panel discussion follow:
External partnerships: Ruthy Kaider from Microsoft Israel said that her company’s CEO took the company in a new direction a few years ago. The focus became selling services instead of selling products. This shift has had a positive impact on Microsoft’s partnership model. Today, Microsoft’s presence in a country enables customers to leverage its solutions.
Microsoft understands that startups are the next form of partnerships, and that it is the power of the ecosystem and the partnerships that allow startups to succeed. Kaidar said that Microsoft built collaborations to help startups reach customers because almost every customer that startups want to reach is already a Microsoft customer.
Innovative thinking: When faced with severe challenges, German energy company Innogy explored many options, including augmented reality (AR) and artificial intelligence (AI), with the understanding that, in the future, the company’s ultimate customer may not be a person.
Dropbox still believes that companies can give people the opportunity to disrupt and provide ideas. About 30% of the ideas for new Dropbox products come from the company’s annual Hack Weeks, and company culture demands that employees think like entrepreneurs.
Management solutions: Dropbox Site Lead Meir Morgenstern described how many individuals spend nearly 60% of the week (or three days each week) managing time. The company is looking for innovative technology solutions to fix this very real problem.
Prioritizing initiatives: Microsoft decides the strategy and pillars that it will focus on at the beginning of the year. The pillars will never compete, and are horizontal.
Rebranding: If a project does not have support from leadership, it will always be a pet project. Innogy’s Inken Braunschmidt advised that it is not wise to try to convince everyone of an idea’s value at the same time, and said individuals should look for good partners who can help the team solve problems rather than trying to solve everything on their own.
Bridging cross-cultural differences: Li & Fung has a 250,000-square-foot space in Shanghai called The Explorium, where partners can share the space, learn and experiment. The company invites senior leaders to Singularity University to experience AR/VR and introduce them to new technologies and trends. The company also connects large companies to startups; the goal is to find the right startup that fits the company’s needs, across borders.
Working with Israeli startups: Every April, Fung Academy holds a startup park event. Last year, three out of the 12 participating startups were Israeli, and this year, six are expected to be Israeli. Fung Global Retail & Technology’s experience working with a number Israeli startups has been positive. Our team has found that the startup teams are very responsive and that the time zone difference is favorable to New York City. The startups we have worked with seem to be able to anticipate our needs, and they know the apparel business well. In addition, we have worked with Israeli startups with particular expertise in RFID tagging, voice recognition technology and cyber security.
Speed Dating One-on-One Afternoon Networking Sessions with Startups
The Fung Global Retail & Technology team met with four startups at the summit in “speed dating” sessions that were held in the afternoon. We met with leaders from an investment fund, a marketplace for modest fashion, a startup that creates footwear-sizing solutions and a logistics solutions provider.
Jumpspeed Ventures is the first venture fund built to capitalize on the Jerusalem startup scene. From 2012 to 2016, the number of new startups initiated in Jerusalem grew by 400%, and Jumpspeed has become the go-to investor for early-stage startups in the city. Jumpspeed’s founder, Ben Wiener, established the fund in January 2014, and since inception, the fund has been able to identify some of the best Jerusalem software startups at the earliest stages. Wiener says he has established a “sweet spot” of criteria that all of his investments must meet.
Jumpspeed is a hybrid venture capital fund and venture builder micro-VC fund. Over the past three years, it has invested in 11 startups. Most of Jumpspeed’s portfolio companies have gone on to raise money from other investors at higher valuations and have brought their products to market; one company, Breezometer, was named by the White House’s Global Entrepreneurship Week program as “Most Promising Startup” in 2014. Wiener is in discussions with investors about his next fund. The focus will continue to be on early-stage startups in Jerusalem.
ModLi is a marketplace for modest, modern women. The marketplace was created more than 15 months ago and is the go-between for 100 different boutiques worldwide. ModLi believes that modesty can be defined in many ways, which allows it to cater to women of different lifestyles and religions. Today, the company sells hundreds of different modest items. Products include formal and casual dresses, shirts and skirts, as well as head coverings and accessories. The company sells items ranging from preteen to adult styles, and in sizes small to plus-size. ModLi says that 90% of its sales are made in the US. The website receives more than 150,000 visitors every month. Founder and CEO Nava Brief-Fried said the company has launched private-label brands and that the market presents much growth opportunity.
Invertex created a retail and omnichannel solution that scans the body to enable more accurate sizing. Today, the technology is being used for footwear and eyewear. In less than 10 seconds, the Invertex app can scan a person’s foot and tell the user the exact size/fit he or she needs, with 95% accuracy. David Bleicher, the company’s CEO, said that shoe sizes delineated by different companies can differ by up to 1.5 sizes. He says that variation in sizing is contributing to the 30%–40% online shoe return rate, compared with the 8% rate for shoes that are bought offline. Invertex is selling its product both in stores and online with a downloadable app. Currently, the brand is working with Famous Footwear. It is also working with PQ Eyewear, using the technology for facial scans. The collaboration allows PQ to customize every frame based on face size and shape.
Freightos is a logistics technology startup that operates an international freight marketplace where retailers can instantly compare global air, ocean and trucking spot quotes from dozens of freight forwarders. Companies can also use the site to book and manage shipments and get live, 24/7 support. The Freightos marketplace is like an Expedia for freight pricing. Users are able to view and manage price quotes on their own without having to wait for a manual price quote, which usually takes upwards of four days and typically does not include any options.
The Freightos technology is also used for freight pricing and routing internally at 90% of the world’s largest logistics providers. A number of large distributers, including Sysco Foods and Marks & Spencer, also use the company’s solutions.