People talk about peace, but war is good business. According to IHS figures, the global arms market had a $64.4 billion turnover in 2014, far greater than the $56.8 billion turnover in 2013. Israel was the world's seventh largest arms exporter last year, an impressive figure that was based to a great extent on technological innovation.
One of the Israeli players in the arms industry is Roboteam, founded in Israel, which currently also operates in the US. The company recently signed a $25 million strategic contract with the US Air Force. "We have signed a series of contracts recently," says Roboteam co-CEO Yosi Wolf, who jointly founded the company with co-CEO Elad Levy in December 2009. "The US Air Force issued a tender that generated intense competition," Wolf explains. "They have infantry forces, and they issued a tender for robots that a soldier could carry. They wanted the best system in the world, and cost was not a very significant factor.
"It was the opportunity of a lifetime," he adds. "We're not the only ones in the market; we competed with very large US companies that make military robots. We worked very hard. They did technical tests that took a long time, and issued their opinion a few weeks ago. We really won first place. It's a five-year project with an option for two more years. In addition, we have now learned that we are in the top 10 of Deloitte's Fast 50 list of growing companies."
The contract with the US army includes not only the robot systems being developed and manufactured by Roboteam, but also regular maintenance of those systems. "This applies to every location in the world where the US army is, for example South Korea, Kuwait, Africa, and Europe. They have a large base on every continent we have to get to. For example, we have a US subsidiary for this purpose that is our field service representative (FSR). They work for us. There are 10 employees in Maryland who travel all over the world and in the US in order to install the systems," Wolf says.
"Globes": Is installation a complicated process?
Wolf: "Because the technology is very advanced, more resources are needed to install it. Ordinary people work for 30 years in a certain way, and we have to get them used to working in a different way."
A solution that lets you work
Wolf and Levy are former officers in a classified air force unit. Wolf later studies physics at university, and Levy studied robotic engineering at the Technion Israel Institute of Technology in Haifa. "We believed that robotics would be the next big thing after the Internet and smartphones," Wolf says. "Each of us invested most of his savings in this dream, and our first office was in an apartment belonging to Elad's grandmother. It didn't take long before our sales went from hundreds of thousands of shekels in 2010 to tens of millions of dollars now." As of now, the company employs a staff of 80 in two companies: one in Israel and one in the US. "We started a company in the US in 2012. All the employees there are Americans, except for the CEO, who was VP here before that."
Wolf emphasizes the fact that the companies work closely with the end users. "When you says robot, people tend to think about Robocop replacing a soldier, but that's not right. A robot is an effective work tool that facilitates better work. We realized that. A robot is designed to serve the soldier, not replace him. That's what the Americans liked. We competed against companies like Boston Dynamic, which made a robot that walks like a robot - but that doesn't work. We came up with a solution that made it possible to work."
What can your robots do?
"For example, instead of a soldier looking over a building, landing route, or building roof, you can send a robot that will check the area ahead of time. In general, that's what we do."
Isn't that what a police robot does when it checks a suspicious object?
"Robots have been in the limited niche of bomb squads for 30 years, which is a very small proportion of what there is today. That type is very conservative and outdated. Just as a revolution has occurred in unmanned aerial vehicles (UAVs) in the past decade, however, a revolution is now taking place in land robotics. We're probably the first people in the world who made a sale to the world's largest army, and to infantry units. It's not just the bomb squad."
Is there a difference?
"When you see a policeman come with a robot, he needs a vehicle to take it, and that's very awkward. What we're doing is much more tactical. Walking on foot is very important to a combat platoon in the field. They're the ones who enter the tunnel, or climb onto the roof."
Do you also have a solution to the size and weight problem?
"Yes. Niche units once had special vehicles. What happened in the world in the two big wars - in Iraq and Afghanistan - is that most of the fatalities among solders were the result of roadside bombs. A robot was needed as the long arm of the infantry. It makes the operation both more effective and safer. That's the innovation."
What does that mean for the weight? How light is it?
"It's a family of solutions that varies from a 1.5-kilogram (3.3 pound) robot, to 10 kilograms (22 pounds) to a product called probot that carries 200 kilograms (440 pounds). What's new about it is that it carries the loads of the entire platoon - it acts as a robot donkey for the platoon, on which all the equipment that must be taken is loaded. It's electrical, quiet, and strong, and it changes the picture entirely. Because of the robot, a platoon can take more ammunition with it, and remain alert when it reaches the target. What's even better about it is that this robot knows how to follow you. It's semiautomatic, so you don't have to deal with operating it. In addition, we have a small robot - IRIS - that the solider carries. The most successful is the micro tactical ground robot (MTGR), which is what really won the tender."
"Most fatalities were in urban areas"
Why is something new necessary?
"Actually, all the warfare in the world, and certainly in Israel, is war against terrorism. That's true in South Korea, the Caribbean Islands, Chechnya, and everywhere else. Today, it's urban warfare, which is asymmetric - the enemy is located within a population, and so divisions and airplanes are less relevant. What is needed? Special forces performing dangerous tasks in the marketplace. We certainly see that in all the recent wars, both ours and those of the US, most of the fatalities occurred in urban areas. That's where we enter the picture. We create technology that makes it possible to change the rules of the game - a tiebreaker enabling platoons and soldiers to be deadlier and less vulnerable, because the robot is the one that enter, and the one that takes the bullet. They call this the absent enemy, who has to be rousted out. If he's hiding from a UAV underground, we bring the relatively safe way of getting him out of there. For the first time in many years, there's a solution beyond the basic one. After all, the enemy also has the basic solutions."
With all due respect to your technology, at some point, everyone will move one step ahead. The enemy will catch up.
"There's always a cat and a mouse, but we prefer to be the cat, to keep the initiative, and to continue going ahead with the technology."
Wolf also cannot resist a little national pride. "Something historic has happened in which the entire country can take pride," he declares. "Never happened before has a small company in Tel Aviv managed to sell a procurement project directly to the Pentagon. Up until now, there were no such small companies, and companies certainly did not sell directly to the US army. The US defense budget is $800 billion, more than the combined defense budgets in the rest of the world."
With all due respect to the US, what about the IDF?
"The IDF is our home customer. I can't list the applications and the names, but I'll say that 100% of Roboteam's management consists of officers. We ourselves use the equipment on reserve duty, and that's what enables us to understand exactly what's needed. Without the IDF and the Ministry of Defense, we wouldn't be where we are today. The Administration for the Development of Weapons and Technological Infrastructure invests a lot in Roboteam. Our sales to the IDF are also paid for with US aid money."
"A great challenge"
Beyond the right idea, what is your advantage?
"There are several vectors. First of all, the costs are attractive. It's obvious to us that we can't make something too expensive. If other companies are making a robot for $200,000, we'll make it for $50,000. Secondly, our systems are intuitive. From my perspective, what we do has to be as simple as operating a light worn on the forehead. When you're fighting in the field, there's no chance of doing anything too complicated. The trick here is to use algorithms a lot. 90% of the robot isn't what you see; it's what's inside it. The third and possibly most important vector is reliability. A system has to work so that the soldier knows that it will always work - in mud, snow, ruins, and when he falls off the roof."
That requires understanding in many fields.
"Right. A robot is a Lego of many technologies: light materials, software, and components that will work at any temperature. That's a great challenge. That's why we have 40 engineers here in mechanics, hardware, and software."
How many women are in the company?
"More than a few, mainly in operative spheres, but there are also several engineers in hardware, welding, and card assembly. It's true that we have fewer women in field work, but that's because of lack of professional experience."
Wait a minute - are you a startup at all?
"Not anymore. We're a small early growth industry. We don't just develop; we also manufacture. At the beginning, we were 100% development, but now only 20% is for developing new products."
Who are your investors?
"I won't tell you all of them, but one important investor is Generali Financial Holdings, which Dr. Itamar Borowitz represents. They made an initial investment. Today, I can tell you that our sales are in the tens of millions of dollars, a year, and the company is making a profit. Venture capital and high tech in Israel tend to stay away from security because they believe that it's a market of monopolies. We did it, though, despite the difficulties. It's like climbing Mt. Everest while wearing slippers."
What comes next?
"After we have sold several hundred systems, we have a clear dream of reaching a thousand system in the field, a thousand life-saving products. There's great satisfaction in this - 80 people working here 18 hours a day in order to realize the dream. It's a source of pride, not just for the company, but also for the Ministry of Defense and the Administration for the Development of Weapons and Technological Infrastructure. Our strategy is top-down - to start as high as possible, and then to sell to the others. We've won other tenders in Poland, Singapore, the UK, and Thailand, but the Pentagon is really the top. They're 80% of the global market. All the employees here are in love with the combination of patriotism, saving lives, field work for Israeli industry, and financial success that enables people to provide for their families. That's a strong combination. When the IDF does an operation and goes into battle, we feel enormous satisfaction."
Some people's eyes don't sparkle when a war breaks out, or during an IDF operation.
"Believe me that when missiles are falling on Tel Aviv, everyone wants to win, and with fewer casualties. I'd be glad to make robots for the agricultural market, but the job of our market is to reduce the number of fatalities."
Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2015
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