International research and consulting firm Frost & Sullivan has ten Israeli defense companies in its sights, and has issued a strong recommendation to its investors worldwide: it’s a good idea to look at the companies and their technological developments, because it’s possible that, for at least some of these companies, breakthroughs are just around the corner.
Among Frost & Sullivan’s list of Ten Aerospace, Defense and Security Israeli Start-ups to Watch in 2015 are aerial land-mine locator developer GeoMine; cyber-security company (ICS)2; electronic warfare system developer MORE-Military Optical RF Equipment; water supply and air-drying solutions company Water-Gen; and maritime ISR and security company WindWard, whose products were used by IDF units to comb Hamas tunnels in Gaza during Operation Protective Edge.
The Frost & Sullivan list was formulated in part on the basis of recommendations made by heads of the Ministry of Defense defense, export and cooperation division (SIBAT) - which also provides support to start-ups developing groundbreaking technology.
“We began putting the list with no fewer than 100 aerospace, security, and defense start-up companies that employ at least 50 workers. Even if some of them already sell products - they still invest incoming money in R&D activities,” Frost & Sullivan Aerospace, Defense, and Security Israel manager Yaki Baranes told “Globes.” “We believe that each and every one of the companies chosen for the list will be interesting to investors. The list is not investment recommendations, rather a recommendation to investors to look more closely at companies that have something to offer,” Baranes said.
Frost & Sullivan’s attempt to introduce investors to companies with potentially high-demand developments based on evolving needs, matched SIBAT’s need to reveal start-ups to global investors to propel them forward. Six of the ten companies that appear on the list have been mentored by SIBAT for a number for years: “Many companies come to us that are seeking partnerships and strategic investors that are willing to take them forward, not only financially, but also to bring their developments to global markets. This list represents the companies that are developing unique technologies - with products for which there is likely to be great demand around the world, and which answer to significant defense needs,” says SIBAT Head of Business Development Shahar Horev.
The list of significant defense needs that Horev mentioned, includes efficient systems to provide accurate and reliable information to locate and expose clusters of landmines. GeoMine, founded in 2007 by defense industry veteran and trained geologist Avi Buzaglo?Yoresh and two partners, is developing a system that can identify landmines from the air.
Widespread activities to locate and clear areas that were embedded with landmines in past wars and confrontations are already appearing on the horizon: “Our system has already been approved for operation by the relevant authorities in the UK, and is being tested by parties involved in international efforts to clear minefields by the UN,” Buzaglo-Yoresh told “Globes”: “We are in constant contact with the Ministry of Defense, as well as the Mine Clearance Authority, which clears landmines in the Golan Heights and in the Negev, and we are working to adapt the system for Ministry of Defence needs.”
Also on the top-ten list is MORE - Military Optical RF Equipment, developer of active and passive electronic warfare (EW) systems. Co-founder and CTO Roman Rabinovich said that thanks to electro-optical technology, MORE’s EW systems are easier to operate, yet more efficient and cheaper to use than existing EW systems on the market today. Like other EW systems, MORE’s is carried on an aerial platform, such as an airplane or UAV, and its job is to disrupt radar systems that are supposed to detect motion in the air or at sea.
But despite MORE’s technological achievements, the small company is still seeking the recognition that will lead it to significant future business activity: "We are putting new technology on the table, and it’s difficult to convince big, traditional organizations, like armies and defense companies to trust it. You have to prove the quality of such a system to them,” Rabinovich said.
Frost & Sullivan’s Baranes said that, at least in some cases, start-ups that develop unique technologies can attain their goals by merging with one of the big defense companies. “Instead of a big company leading a specific development plan for a specific need, in many cases it’s preferable for them to acquire one of the small companies, which are fueled by a lot of courage, and good inventions,” he said.
SIBAT’s Shahar Horev confirms that there is growing interest on the part of big industry, which would rather acquire a company with a product than invest resources such as time and money in a development plan: “Over the past year, I have felt more strongly the activity of investors looking for what to invest in - and they come to us as well. It seems to me that these investors are looking less for high-risk investments, and they want more to go for something sure, like a company that already has a product, and has even begun to sell abroad. There are also investors who come from abroad with money, and simply want to find a good alternative financial investment,” she says.
Published by Globes [online], Israel business news - www.globes-online.com - on April 27, 2015
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