India’s talent and Israeli tech are combining to take the fight to the Silicon Valley. Reliance Jio, Paytm, Flipkart, Freshworks, MakeMyTrip, Wipro, Infosys, among others, have already partnered with the Startup Nation. The race for acquisitions is gathering pace.
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When 29-year old Chartered Accountant Saket Agarwal decided to bring Israeli technology to India, he saw what many opportunists didn’t see – growing B2C businesses in India with the help of the strong deep tech ecosystem in Israel.
His company, Onnivation began its tryst with destiny in 2015 and worked on bringing the best of deep tech from Israel into India to solve a common set of problems around Data Science, Devops, Adtech, Cyber Security. All these tech-related issues stand in the way of B2C companies scaline new heights in the globalised world. Today, the investment firm has done 15 joint ventures with Israeli companies and counts India’s top startups and corporate giants as its clients.
From Flipkart’s Myntra to Zee India’s Zee5, Viacom18, MakeMyTrip, Freshworks, Kotak and ICICI Bank, the list of tie-ups is long but the pursuit for excellence has just begun. One of Israel’s most valuable private technology companies, IronSource, which works with India’s leading app developers, mobile OEMs and carriers such as PhonePe and Samsung India is bullish on what the Indian market has to offer.
“The best, most innovative technologies are developed in response to a pressing need which can’t be solved by any solution currently available. India has a unique set of challenges, which cross a wide variety of industries and which can spawn incredibly innovative technologies that impact the lives of millions,” the adtech firm’s co-founder Arnon Harish told Entrepreneur India.
The sentiment on the Indian side is similar with industry leaders such as the 93- year old Essel Group’s newly launched video on demand website ZEE5 India actively imbibing Israeli technology.
Tarun Katial, CEO of ZEE5 India, feels India needs to move its entire engineering effort from services to making world class products. “In India if the tech companies move from service and development to solving problems of global scale, it will be a step in becoming the tech capital of the world,” says Katial.
ZEE5 India is already working with Cloudinary, a market leader in inclusive cloud-based image video management, Optimove which assists brands with emotional intelligence, Minute.ly, which uses Artificial Intelligence (AI) to increase profitability by leveraging video content and Kaltura which provides video solutions to organisations.
India is undoubtedly one of the world’s most attractive battlegrounds for global brands believe many Israeli startups and investors.
Barak Granot, Head of Economic & Trade Mission, Embassy of Israel in New Delhi, thinks that any Indian company reaching out for an Israeli tech partner would be impressed by the speed, efficiency and result-oriented manner that characterize the Israeli tech companies.
No wonder, Israel’s biggest VC fund OurCrowd’s portfolio companies have identified India as a sweet spot.
Jonathan Medved, Founder & CEO of OurCrowd, says India is at the brink of an agriculture revolution and it is expected to be based on sensor-driven data managed by AI, Machine Learning (ML), algorithms – all of which is a stronghold of Israeli tech startups.
The crowdfunding equity platform has already invested in India’s succesful car-rental startup ZoomCar. Among its other entrants in the Indian ecosystem is Zebra Medical Vision, which has a partnership with India’s top hospital chain Apollo Hospitals.
Eyal Gura, Co-Founder & Chairman of Zebra Medical Vision, is confident India is going to be among the world’s top three healthcare markets in the next decade. Gura thinks the fund’s partnership with Apollo will be an enabler for Modicare.
Futuristic mobility company SkyTran has partnered with India’s richest man Mukesh Ambani to launch its ambitious transit pods in Mumbai. SkyTran’s CEO John Cole believes Ambani is a visionary and finds India the perfect launch pad for SkyTran’s transit pads.
A portfolio company of Israel-based Pico Partners, Spotinst, is bringing Israeli innovation in cloud computing to Indian companies. Spotinst saves upto 80 percent cost on cloud bills and charges 20 percent of the savings – a model that is suited for the Indian market. It counts India’s Lenskart and Paytm as its customers.
Mark Van Den Haak, VP of Sales, APAC, Dynamic Yield, thinks the sheer scale of the Indian market is particularly attractive for any tech company. The Indian market is also less complicated than China, but at the same time it remains very fragmented, believes Haak.
Recently, McDonald’s acquired Dynamic Yield, a decision-logic technology provider for $300 million marking the Chicago-based company’s biggest acquisition in March this year.
The CEO of Sapiens International Corporation, a NASDAQ-listed insurance software provider based out of Israel, Roni Al-Dor calls a remarkable synergy between the Startup Nation and India the reason for the firm’s expansion in India.
Sapiens has built one of its largest sites outside of Israel, complete with R&D and a sales team, employing over 800 individuals on the ground in India.
KEY OPPORTUNITY AREAS
Granot thinks Indian startups do not need help from Israeli tech companies. But collaboration in R&D between innovative companies in India and Israel can benefit both sides.
For instance, cyber security companies in Israel can tie up with fintech/mobile payments companies in India. Similarly, E-mobility companies in India and Israel can provide cleaner, safer, and smarter mobility experience for Indian drivers and passengers. Medical devices and digital health companies in both the nations can cut costs and provide E-health solutions.
The impressive list of Indian majors adopting Israeli tech includes Bharti Airtel, Wipro, Infosys, SAR Group, GMR, Sony India, Tech Mahindra, Triveni Group, JIO, IDEA, NDTV, Jain irrigation, Taj Hotels, ITC Hotels as well as Delhi Jal Board, BSNL, TaTa, AP, Kolkata and Karnataka Police, the Indian military, NTPC and the Chennai Municipal Corporation in the government domain.
Lucid IL’s Tzakhi Freedman feels Israel’s expertise in AI and algorithms, thanks to the military background of many Israeli founders, can be beneficial for India in various domains, including fintech, industry automation and music. His company Lucid IL is a business consulting firm located in Tel Aviv specializing in business partnerships between Israel and India revolving around technological developments.
Prime Minister Narendra Modi and the Global Innovation & Technology Alliance are keen on tie-ups in ICT, health, water and agriculture, says Senior Director of Asia Pacific Operations, Israel Innovation Authority, Avi Luvton.
“We’ve seen interest from private sector companies like EM3, which makes Israeli agri-tech accessible to Indian farmers, and Wipro Group, which adapts Israeli technologies, he adds.
Max Simonovsky, Founder & CEO of Soapycare – the IoT company that develops hygiene micro stations to provide accurate dose of soap and water – believes India is the best destination for technology absorption in the world.
The Chief Commercial Officer of mPrest Ron Halpern opines that the opportunities – from managing distributed renewable energy resources to increasing energy efficiency by predictive maintenance of legacy utility assets – for sustainability and creating cleaner energy in India are endless. Apart from technology exchange, startups of both the nations are sought-after for acquisitions.
Among the lucrative acquisitions of Israeli startups by Indian companies are Maxximilk, which was picked up by Godrej Agrovet and Upstream Commerce, which was bagged by Flipkart.
The M&A activity is also picking up. The latest Indian company to be grabbed is Chennai-based Air Freight Bazaar, which was acquired by Israel-based Freightos. The latter has the world’s largest air cargo rate database. “India & Israel boast both archaic industries as well as an entrepreneurial drive to change those industries using digitization,” believes Zvi Schreiber, the CEO of Freightos.
EXCHANGE OF LEARNINGS
Israel is a country with more startups per capita than almost anywhere else in the world. India can look at the Israeli ability to decide quickly, make bold moves, daring to take on any competition while aiming at the top and Israelis can learn from India the value of long-term strategic planning, and the ability to build to scale, believes Freedman.
Elie Wurtman, Founder of Pico Partners, says the Israeli tech ecosystem has a unique ability as problem solvers to see the world not as it is, but as it could be. “We believe that this unique skill set, coupled with India’s capabilities and large market, present a win-win opportunity,” he adds.
One of the critical elements that would encourage innovation especially for early stage companies and the fledgling startup ecosystem is a comfort with risk taking and failure. This attitude must be fostered even at the school level, believes Harish.
Omer Paz, COO of Paykey, says being blunt may not be the best way to handle all situations, but it helps.
The co-founder of MUGO, an Israel-based social music app, Ori Segal says Israel’s ability to produce breakthrough technology at a reasonable price is a win for India. Itay Jonas, VP Business Development of WonderLogix, a software platform for industrial designs, feels collaboration with local companies in India will bring about a new industrial revolution.
So, the verdict of the business world is unanimous: India and Israel can together conquer the next tech frontier.
(This article was first published in the May issue of Entrepreneur Magazine. To subscribe, click here)