From Start-Up Nation to Scale-Up Nation: Insights from Global Corporate Venturing Israel 2019
In 2009, Dan Senor and Saul Singer wrote the New York Times Bestseller “Start-up Nation: The Story of Israel’s Economic Miracle”. In it, the authors look at how Israel—a 60-year-old nation at that time, with a population of 8.7 million people—was able to reach new economic heights thanks in large part to its technology startups and large venture capital industry. Ten years later, Israel isn’t just the Start-Up Nation but the Scale-Up Nation, and at the second annual Global Corporate Venturing Israel event, attendees had the opportunity to understand that evolution and what’s coming next.
“No investors are better equipped to help their portfolio companies than corporate ventures,” Tim Lafferty, COO, Global Corporate Venturing said in his opening keynote. “Our mission is to bring together all the key players in the industry for discussion, analysis and commentary to keep our audience in the know.”
This year’s event drew executives from the Israel Innovation Authority, GE Ventures, General Motors, Dell Technologies Capital, Bosch Venture Capital, Deutsche Telekom Capital Partners, Hyundai, Continental, Siemens, Samsung Catalyst Fund, Citi Ventures, Silicon Valley Bank, Intel Capital, Qualcomm Ventures, OurCrowd, and many others.
“Three-hundred and eighty multinational corporations have an active presence in Israel,” said Aharon Aharon, CEO of the Israel Innovation Authority. ”While globally, CVCs contribute 20% of the capital for venturing, in Israel, CVCs take a significantly greater role by investing 33% of total venture capital raised. Israel has a vibrant startup ecosystem—it is third on a global scale in absolute number of AI companies, following the U.S. and China”.
David (Dede) Goldschmidt, Vice President & Managing Director at Samsung Catalyst Fund, participated in the panel “Scaling Up – How Corporates Are Helping Their Portfolio Companies To Scale.” The panel was moderated by Alex McCracken, Managing Director, Silicon Valley Bank, and Dede was joined on stage by Merav Weinryb, Managing Director of Qualcomm Ventures; Orly Glick, Vice President Value-Added Services at Vintage Investment Partners; and Laly David, Business Development Partner at OurCrowd.
“There are multiple opportunities to leverage engagements with large corporations such as Samsung to grow and scale the business,” Dede said. “It really depends on where a startup is in its lifecycle and what assistance they may need.” He gave the example of Innoviz, a leading manufacturer of high-performance, solid-state LiDAR sensors and perception software, which Samsung Catalyst Fund invested in 2017.
A year and a half later, Innoviz and HARMAN, a wholly-owned subsidiary of Samsung, announced a partnership to deliver Innoviz’s solutions to automakers globally.
“Innoviz’s case demonstrates the benefits that startups can get from connecting to a corporate venture arm such as the Samsung Catalyst Fund,” said Dede. “Beyond the capital, the companies can leverage the relationship to develop a channel into very large customers, such as auto makers.”
Dede also described how working with a venture arm can help shape a company’s strategy to better address the market.
“We had a startup that reached out to us with a technology targeting the mobile market,” Dede explained. “After speaking with the Samsung Catalyst Fund and business units, we helped the company refocus its efforts into the automotive space and it was later acquired.”
These kinds of insights are what separates apart corporate venture arms such as Samsung Catalyst Fund—the ability to see, understand, and react to what comes next to enable our portfolios to succeed at scale.