Cellcom, Elron to invest jointly in startups

Startup

Elron CEO: We're trying to take advantage of each other's relative advantages.

Israeli mobile operator Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) and investment company Elron Electronic Industries Ltd. (TASE: ELRN), both of which are IDB Development Corporation Ltd. (TASE:IDBD) subsidiaries, today announced cooperation between them. This cooperation is likely to include investment in Internet of Things (IoT) and cyber startups. Cellcom and Elron are managed by CEO Nir Sztern and CEO Ari Bronshtein, respectively.

Bronshtein told "Globes" today that his company was already investing $30 million a year in startups, with two thirds of this investment being in medical devices startups. He added that over the past year, Elron had invested $10 million in five IoT and cyber companies, with some of the investments being made directly and other through Elron's RDC subsidiary.

Commenting on the activity launched today, Bronshtein said, "We're trying to take advantage of the relative advantages of Cellcom; Rafael Advanced Defense Systems Ltd., our partner in RDC; and our own relative advantages in advising companies and managing investments. For example, Cellcom has an option to provide startups with access to an IoT laboratory."

Bronshtein predicted that the total amount that Elron invests annually would not change, but that its composition would be different, with a smaller amount be allocated to medical devices. He added that there was no defined amount for the total investment, noting, "There's a broad range of companies, and you can't know whether you'll want to invest hundreds of thousands or a few million dollars. As of now, the amounts that the companies are raising in these sectors are relatively small."

Although Cellcom and Elron are cooperating in finding and advising startups, each company will decide independently of the other whether to make a specific investment.

A joint technology committee, headed by Elron VP cyber investments Zohar Rosenberg and Cellcom CTO Ron Shvili, will evaluate the companies that are candidates for investment. Each of the companies is already cooperating with startups in its core business.

Shvili said, "Working with startups in the early stages is helping Cellcom install new technologies on the one hand and influence the design of products and make them better adapted to the market on the other. The companies working with Cellcom obtain access to some of the world's leading technological infrastructure in the sector, and to equipment costing tens of millions of dollars, which can significantly shorten their development times."

Rosenberg added, "With so many startups around, the combination of Elron and Cellcom's know-how and experience at an early stage will make it possible to detect more quickly who has a better chance of success and who has winning technology, and to produce a mature product more quickly. We'll work closely with companies in order to analyze and understand the market and the competition map, and in order to pave the way for the most suitable product concept for the market. In this way, we'll improve the chances of these companies succeeding in a competitive world."

Published by Globes [online], Israel Business News - www.globes-online.com - on April 3, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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