Israeli company Carbyne, a developer of technology for smart communications with emergency sites, announced on Thursday that it had raised $25 million in an expansion of its B round. The raise was led by Hanaco Ventures and ELSTED Capital Partners, with participation from KKR chairman David Petraeus and all existing investors, including Peter Thiel's Founders Fund, and FinTLV.
Absent from the round was former prime minister Ehud Barak. Barak was the public face of the startup in its first years, but last May he stepped down as chairman. Barak was an investor in Carbyne from its seed stage, but at the same time as he resigned as chairman his stake in the company was sold to new investors. Carbyne co-founder and CEO Amir Elichai took over as chairman as well.
Barak's resignation followed the revelation by Haaretz reporter Gidi Weitz that he had invested in Carbyne (formerly Reporty) through a partnership with US billionaire and convicted sex offender Jeffrey Epstein. Weitz claimed that Epstein financed a large proportion of the investment, and had in effect become a partner in the venture fronted by Barak. Carbyne's management said that they knew nothing of the partnership with Epstein and had never met him, and that they discovered his role only through the press and media.
Pinhas Buchris, formerly commander of IDF intelligence unit 8200 and director-general of the Ministry of Defense, who was another investor in Carbyne's seed round and who remains a shareholder in the company, also stayed out of the current round, Buchris has said in the past that he was unaware of Epstein's involvement.
A new private investor in the current round is David Petraeus, formerly commander of coalition forces in Afghanistan and Iraq and director of the CIA. He resigned from the last position after only a year, following the revelation of an extra-marital affair. He was later investigated by the FBI for allegedly mishandling classified information.
"Carbyne is bringing the public safety market the update it has needed for about a decade," Petraeus said. "The ability to create transparent emergency communications between citizens, emergency call centers, first responders, and states will create a mastery of emergency management, and, most importantly, to lives saved every year."
In explaining to "Globes" the choice of well-known military figures as investors in the company, Elichai told "Globes", "In our world, it's important that they believe in the company. It's something that can help to open doors for us with our main target customers, which are regional and central governments."
Carbyne was founded in 2015 by Elichai, Alex Dizengoff (CTO), Yony Yatsun (engineering lead), and Lital Leshem, who remains a shareholder but who has no active management role. The company employs more than 100 people, about 60 of them in Israel and the rest in offices in New York and Mexico. It does not officially report its revenue, but Elichai says that it is in the millions of dollars annually.
Thus far, Carbyne has raised $53 million in total. It raised the first part of its B round in 2018. Elichai says that the current round was originally conceived at the beginning of the coronavirus pandemic, in order to provide the company with cash to survive what looked at the time like a crisis.
"It was meant to be a round among existing investors amounting to $15 million to give us back-up for dealing with the coronavirus pandemic without laying off employees. At the same time, we cut employees' salaries by 18% and gave them options. After we saw that things were moving forward, we restored pay levels and decided to expand the fund-raising round and open it up to new investors," he says. The money will be applied to expansion in the US market, with the aim of reaching a nationwide presence there by 2023, and to development of additional products.
The US and Mexico are Carbyne's main markets. In local authorities where the company is authorized to operate, its technology automatically turns a 911 call to emergency services into a smart call, giving the caller's location and opening a video call with him or her, in order to expedite the response to the emergency incident. This happens through integration of Carbyne's technology with the telephone's operating system. In New Orleans, for example, the technology has also been used to examine remotely the state of health of Coid-19 patients and to help decide whether to send them an ambulance.
In other places, such as Israel, India, and the Philippines, the process is less automated. It involves sending a link to the telephone of the person who called the emergency call center. Only after the caller opens the link does the call become a smart call, with video and location sharing. In Israel, Carbyne cooperates with volunteer emergency service United Hatzalah, the Israel Fire and Rescue Authority, and several municipalities, but not with the police or ambulance service Magen David Adom. "Organizations in Israel want to develop everything by themselves," explains Elichai. Carbyne also develops systems for the emergency services themselves, including analysis and call management systems.
Published by Globes, Israel business news - en.globes.co.il - on January 17, 2021
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