Eighty-five start-ups will crowd into one pavilion at the Telecom 2000 exhibition opening next week to hawk their wares (or at least the idea behind the “future product”). The pavilion was organized by Israeli Industry Center for R&D (MATIMOP), under the auspices of the Chief Scientist.
MATIMOP, established by the Ministry of Industry and Trade and the Manufacturers Association, issued a public call several months ago, inviting interested companies to register with the Chief Scientist. Reading that document shows that the Office of the Chief Scientist wishes to present the newest companies. For this reason, the price of a presentation booth to a company founded after 1995, with private or venture capital fund ownership, and with sales of less than $500,000 over the past year, is less than a third of the price paid by companies not meeting these criteria.
Face-to-face meetings between the start-up representatives and potential investors are expected to take place during the exhibition, and MATIMOP is profiling all the companies on a web site to facilitate pre-selection by visitors, according to their fields of interest. A “meeting-place” pavilion has been set up for this purpose, with eight fully equipped and connected rooms. A special manager will handle the timetable for the meetings, so that unplanned meetings resulting from visits to the exhibition can take place during the proceedings. In addition to the 85 companies making presentations in the pavilion, the web site includes information about over 300 additional companies, some of which are defined as more “mature”, seeking partners for technology and information projects. MATIMOP will act as a broker between the companies and the overseas visitors after the exhibition also.
In contrast with the previous exhibition, in which optical communications did not attract special interest and only one or two companies presented developments in the field, a respectable number of optical start-ups are making presentations in the current exhibition. Broadband communications over both line and cellular infrastructure, as well as specifically cellular Internet developments, will also have a considerable share in this exhibition.
Ministry of Industry and Trade Chief Scientist Carmel Vernia emphasizes that the initiative for setting up the start-up pavilion in the exhibition, for which he does not claim the credit, was ahead of its time. The first pavilion was staged in the previous exhibition in 1998 and included 80 companies. 600 meetings between the companies seeking investments and cooperation and investors and other companies took place there.
”Globes”: Does the list of companies making presentations this year include companies that had presentations in the previous exhibition?
Vernia: ”Only a few. I’m happy to say that most of the companies are true start-ups, founded in the last two years.”
Does collecting the start-ups under one roof help more than the individual efforts of each company? Won’t segmenting before traveling to overseas exhibitions enables a company to target its potential investors and partners? Is the prestige obtained from the Chief Scientist’s sponsorship really effective for companies?
”It’s a question of economic effectiveness. Traveling to meet a specific investor or potential customer is obviously more effective. Here, however, at almost no cost, you meet dozens or hundreds of representatives from around the world. Very few exhibitions in Israel can boast so many important overseas personalities, and the companies have to be levered by means of the exhibition.
”The level of this conference is the highest ever in Israel, definitely on a par with overseas conferences and exhibitions. The quality of the lecturers, the importance of the participants, and the extent of activity are unprecedented. For this reason, it is attracting a large audience of the appropriate people, which gives small companies a chance for exposure. Not only global communications companies, but also large Israeli companies will get their first opportunity to meet start-ups likely to interest them.”
How do we avoid the trap of having Israeli companies exposed to global companies, who may wish to transfer development centers overseas?
”It is always possible to transfer an Israeli company overseas. If they want to acquire an Israeli company, it won’t be because of the exhibition. Their own advisors can do that by themselves. We think that giving companies exposure will help them get strategic partners, who will leverage the their activity in Israel, making them larger companies here.”
The Chief Scientist’s starting lineup
Fifteen start-ups will be highlighted by MATIMOP and the Chief Scientist.
Since not all the companies exhibiting in the pavilion can be discussed, “Globes”, in cooperation with the Office of the Chief Scientist, has prepared a list of 15 companies in various technology fields. The following companies are receiving no preference or special conditions; the Chief Scientist chose them for their technological activity and promising growth potential.
LetMeKnow Technology
The company, founded in 1998, facilitates content transmission according to criteria defined by the cell phone user. The content transmitted varies from share price changes to goals scored in soccer games. Company chairman Aviv Salhov and Crystal Systems Solutions each hold equal shares in the controlling interest in the company, which employs 20 staff.
The Tel Aviv-based company recently raised $3.5 million from the Formula fund, Aria Ventures, Michshuv Yashir, and private investors. The company’s market value is estimated at $10 million.
BmyPC
The company enables surfers to work on the Internet in a personalized work environment on a network, called a “virtual computer”. The company was founded in 1999 by president and Yuval Eyal, VP marketing and sales Eran Pfeffer, and CTO Dror Shalev. Yossi Cohen was later appointed CEO.
BmyPC has offices in Tel Aviv and California and a payroll of 30. To date the company has raised $2.5 million at a company value of $10.5 million.
Galaxtel Solutions
The company, a Telrad spin-off, is developing a system for transmitting interactive multimedia content suitable for broadband over existing infrastructures. Future customers are likely to include TV content providers, as well as e-learning, computer games, and other companies. The company was founded in March 2000 and is located in Lod.
Pegasus Technologies
Pegasus is the oldest of the companies appearing on this list. It was founded in 1991, and is considered a mature company. The company’s 20 employees, located in offices in Azor, develop multi-dimensional tools – keyboards, mice, pens, and joysticks – facilitating the use of ultrasound and infrared for exact pinpointing in space. The company value is estimated at $18-20 million.
FibroLAN
One of the companies from the Yokne’am high tech zone, Fibrolan develops optical convertors operating on local area networks (LAN). The company, founded in 1996, has eight employees, and has raised no capital to date.
Lambda Crossing
Dr. Moti Margalit and Prof. Meir Orenshtein founded the company in September 1999. The interim chairwoman is former Ministry of Industry and Trade Chief Scientist Orna Berry. The Caesarea-based company has 12 employees and develops wavelength division multiplexing (WDM) switches for optical communications networks designed to reduce costs and expand usable bandwidth. To date Lambda Crossing has raised $7 million from Gemini, Star Seed, Garage.com, and Lucent Venture Partners, at a company value of $25 million.
Feather Mobile Systems
Feather has developed the Gwap, a WAP protocol enabling content and applications to be converted from the Internet and databases into all types and models of cellular devices. The company is also the Israeli franchise holder for Digital Mobility and operates the Inhand Israel cellular portal, which transmits local content, such as news, economic information, entertainment, sports, etc.
mPrest Technologies
The company was founded in April 2000 by president Reuven Gamzon and CEO Eli Arlozerov as WapDwap, and subsequently changed its name to mPrest. The company employs 20 staff in its Tel Aviv offices. mPrest claims that its product will enable cell phone owners to receive information from practically any information source whatsoever, whether the site is WAP or HTML, and view the information on the screen. To date the company has raised $4 million from Polaris Venture Capital Fund III, Technoplus Ventures, Chase Capital Partners Fund, Ampal-American Israel, and Shrem Fudim, Kelner-1.
LaserComm
CEO Eduardo Shoval and CTO Yochay Danziger founded the company in 1998. LaserComm, like half the companies on the list, develops components for optical networks. The company has 55 employees in its Tel Aviv development center and another 50 in its Texas manufacturing center.
Runcom Communications
Runcom develops chips for broadband communications networks, particularly in the cellular field, and provides consultant services to companies. Runcom president and CEO founded the Rishon LeZion-based company, which today has a payroll of 24, in 1997. Runcom is part of a European consortium formed to receive development assistance from the European Union Fifth Framework Program.
Charlotte’s Web Networks
The company’s name comes from the well-known US children’s story about the spider Charlotte, who spun webs to save Wilbur the pig. The company was founded in 1998 by Eyal Dagan (recently removed from company management on orders from MRV, which holds 53% of Charlotte), VP for R&D Eli Stein, chief architect Ilan Shimony, director of ASIC design & advanced technologies Ayal Avrech, and VP Gidi Kempfer. Charlotte’s Web develops technologies for extremely high-speed optical routing that support information and voice transmission. The company value is considered to be particularly high, with estimates varying from $700 million to $1 billion. The company has a development center in Yokne’am and manufacturing facilities in Massachusetts.
CellActive
CellActive is developing an e-commerce platform for mobile devices. Its products are designed for communications networks with a large traffic volume. The company’s 13 employees are located in the company’s Ramat Gan offices.
Mango DSP
Mango DSP, located on Har Hotzvim in Jerusalem, has raised $7.5 million to date at a company value of $30 million. The company has developed technology facilitating rapid design of DSP chips for cellular telephone and communications networks component manufacturers. Mango DSP was founded by president Mike Berlin and Baruch Peled and employs 50 staff.
Trellis Photonics
Trellis was founded in 1998 by president Elon Littwitz and company director Hebrew University Prof. Aharon Agranat, who developed the Electroholography (EH) technology, on which the company bases its switches for the DWDM (fiber-optic) channels market. The company has 60 employees in its Yokne’am and Jerusalem development centers.
In September, the company’s value was estimated at $150 million, following a $25 million capital raising round completed at the time. It was recently learned that the company’s headquarters have been transferred to Columbia, Maryland, and another branch with 250-400 employees is planned. Two months ago, Trellis appointed Timothy Cahall, former marketing and sales manager of Lucent’s optics division, as CEO.
Celletra
In April, Celletra completed a $22 million financing round at a company value of $110 million, after money. The company has raised a total of $34 million. Celletra was founded in 1997 by president and CEO Dr. Joseph Shapira and Gideon Argaman. The company develops architecture for existing and third generation cellular networks, mostly utilizing CDMA technology. Celletra’s development facilitates remote control of Internet transmission stations, thereby removing the need for physical access to the stations. The company employs 20 staff in its Yokne’am offices.
Published by Israel's Business Arena on October 31, 2000