Medtronic partners with cybersecurity startup Sternum to protect its pacemakers from hackers

If you think cyberattacks are scary, what if those attacks were directed at your cardiac pacemaker? Medtronic, a medical device company, has been in hot water over the last couple of years because its pacemakers were getting hacked through their internet-based software updating systems. But in a new partnership with Sternum, an IoT cybersecurity startup based in Israel, Medtronic has focused on resolving the issue.

The problem was not with the medical devices themselves, but with the remote systems used to update the devices. Medtronic’s previous solution was to disconnect the devices from the internet, which in and of itself can cause other issues to arise.

“Medtronic was looking for a long-term solution that can help them with future developments,” said Natali Tshuva, Sternum’s founder and CEO. The company has already secured about 100,000 Medtronic devices.

Sternum’s solution allows medical devices to protect themselves in real-time. 

“There’s this endless race against vulnerability, so when a company discovers a vulnerability, they need to issue an update, but updating can be very difficult in the medical space, and until the update happens, the devices are vulnerable,” Tshuva told TechCrunch. “Therefore, we created an autonomous security that operates from within the device that can protect it without the need to update and patch vulnerabilities,” 

However, it is easier to protect new devices than to go back and protect legacy devices. Over the years hackers have gotten more and more sophisticated, so medical device companies have had to figure out how to protect the devices that are already out there.  

 “The market already has millions — perhaps billions — of medical devices connected, and that could be a security and management nightmare,” Tshuva added.

In addition to potentially doing harm to an individual, hackers have been taking advantage of device vulnerability as the gateway of choice into a hospital’s network, possibly causing a breach that can affect many more people. Tshuva explained that hospital networks are secured from the inside out, but devices that connect to the networks but are not protected can create a way in.

In fact, health systems have been known to experience the most data breaches out of any sector, accounting for 79% of all reported breaches in 2020. And in the first 10 months of last year, we saw a 45% increase in cyberattacks on health systems, according to data by Health IT Security.

In addition to Sternum’s partnership with Medtronic, the company also launched this week an IoT platform that allows, “devices to protect themselves, even when they are not connected to the internet,” Tshuva said.

Sternum, which raised about $10 million to date, also offers cybersecurity for IoT devices outside of healthcare, and according to Tshuva, the company focuses on areas that are “mission-critical.” Examples include railroad infrastructure sensors and management systems, and power grids.

Tshuva, who grew up in Israel, holds a master’s in computer science and worked for the Israeli Defense Force’s 8200 unit — similar to the U.S.’s National Security Alliance — said she always wanted to make an impact in the medical field. “I looked to combine the medical space with my life, and I realized I could have an impact on remote care devices,” she said.

Is there a marketing crunch in Israel? A chat with an Israeli Unicorn CMO

Israeli startups raised over $2 billion in March 2021 alone. As the startup ecosystem in Israel scales, so must the teams leading the growing number of Israeli unicorns. Is there a marketing crunch in Israel? How should Israeli startups think about marketing?

In the previous episode, we’ve heard from experienced CMO Hila Shitrit Nissim, and today VC Cafe features Ran Avrahami*, Chief Marketing Officer at Appsflyer, a leading SaaS mobile marketing analytics and attribution platform. In November 2020, Appsflyer announced a $210 million round led by Salesforce Ventures at over $2 billion valuation. Mobile advertising is at the forefront of Marketing, so I think you’ll appreciate Ran’s perspective.

VC Cafe: The common case in Israel is founding teams flying solo without a marketer until it’s imminently necessary. Do you think different categories or products require different timing in terms of adding on a marketer?

One way of thinking about it, is whether you are inventing a brand new category, or challenging / reinventing an existing one. If you’re inventing a category, marketing needs to come really early on, because market education and brand / community building is critical for business success. 

With challenging existing categories, the initial role of marketing is much more tactical: business support function and internal enablement, lead gen etc.. Both aspects of marketing are important; it just depends on the timely business needs.

VC Cafe: What’s the best advice or practical tips you have for founders with regards to marketing and branding at seed stage? 

First, focus on doing one thing and doing that thing really well (think ‘what do you want to be famous for’). Stay focused and block out the noise. This can be really hard for early stage startups, but it means the difference between being good or being great. For us it was creating memorable experiences, and a personal connection. We always go above and beyond to create unique activities. It is our speciality; it’s even been dubbed by our peers as our ‘moat’. If you’re hyper focused on your mission, you’ll be able to run fast. And running fast as an early stage start-up is so important.

Second, don’t follow a generic playbook. When I started at AppsFlyer I didn’t google ‘how to build a B2B marketing plan’. I focussed on small experiments. If something failed, I moved on. If something worked, I doubled down and worked on scaling it up. Once I got it down to a science, I’d repeat the process with something else. That to me is really the best practice. Experiment / Measure / Iterate. 

Third, above all, always provide value. Create win-win situations for you and other players in your ecosystem. This is key, especially when you’re operating with a “zero budget marketing” mindset. Playing an advisory role for reporters to share interesting data insights and leveraging our partners to create interesting industry content worked very well for us in our early days.

VC Cafe: There’s a rise in community led startups. What best practices have you seen in Israel when it comes to community building?

Be customer-obsessed. Focus on the “who”. When you’re doing what’s right for the end user, everything else falls into place.

Build trust, this is key. It’s the essence of community. Being transparent and working alongside your community are two important ways to build and foster trust.

I’ve said it before, but it’s an absolute must. Bring value. Make sure you’re solving a pain point. Nothing rallies a community more than problem solving.

Find your “super users”, the super passionate people that represent your customers at scale; they’re your champions.

VC Cafe: What’s expected from a CMO today has changed from 10 years ago. Is there a marketing talent crunch? 

CMOs are expected today to have a growth mindset and to be accountable for revenue, as well as building a brand for the long-term. And you know what? That’s fantastic. Gone are the days that the marketing org is only in charge of ‘making things pretty’. CMOs must grab a legit seat at the table.


Ran avrahami
Ran Avrahamy – Appsflyer CMO

*About Ran Avrahamy:
Managing a complicated relationship with mobile. (Too) early adopter. Loves being an entrepreneur, but hates that word. Now CMO at AppsFlyer – the leading mobile attribution & marketing analytics platform. Before joining AppsFlyer, Ran co-founded Scringo, empowering native apps with social & communication capabilities, and worked in various marketing & business development roles, helping startups grow.

The post Is there a marketing crunch in Israel? A chat with an Israeli Unicorn CMO appeared first on VC Cafe.

ironSource is going public via a SPAC and its numbers are pretty good

Israel’s ironSource, an app-monetization startup, is going public via a SPAC.

But before you tune out to avoid reading about yet another blank-check company taking a private company public, you’ll want to pay attention to this one.

For starters, this is the second SPAC-led debut from an Israeli company in recent weeks worth more than $10 billion. And secondly, ironSource is actually a pretty darn interesting company from a financial perspective.


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The company follows eToro in announcing its combination with a public entity designed to help startups get over the private-public divide. And valued at just over $11 billion by the deal, it will best eToro’s valuation by several hundred million. Combined, both companies will bring more than $20 billion in liquidity to their founders, backers, ecosystems, employees and SPAC teams associated with their impending debuts.

This morning, let’s rewind through TechCrunch’s ironSource coverage during its life as a private company and then examine its financial results. At the end, we’ll ask ourselves whether its new valuation makes any damn sense.

It’s Monday, and that means it’s time to strap in and get to work. Let’s get to it!

ironSource’s past, performance and future

TechCrunch has covered ironSource for years, including a piece on its 2014-era $85 million investment. At the time, we noted that the company “support[s] about 5 million installs per day and [has] more than 50,000 applications using [its] SDK.”

In 2019, ironSource raised more than $400 million at a valuation of more than $1 billion, though details were fuzzy at the time. TechCrunch wrote about the company last month when it announced its second acquisition of the year; ironSource bought Soomla —  app monetization tracking — and Luna Labs — video ad tooling — toward the end of its path to a public debut.

PitchBook data indicates that the company was worth an estimated $1.56 billion when it closed its 2019-era round. That ironSource intends to go public with a valuation of $11.1 billion means that it is shooting for a commanding increase in value in just a few short years.

Is the company worth the new number? Let’s find out, starting with a look at its revenue growth over time:

First, observe the company’s historical performance in 2020 compared to 2019; posting 83% revenue growth from a nine-figure base is impressive. ironSource only expects to grow a hair over 37% in 2021, however, though it doesn’t anticipate further revenue growth deceleration in percentage terms the following year.

The chart on the right is useful as well. Note how the company’s 2019 saw strong growth from its Q1 to its Q4. But also note its flat summer, in which sequential growth came to a near-halt. Comparing that lackluster middle period with the rapid growth ironSource posted in every quarter of 2020 is stark. Sure, the pandemic boosted screen time for all of us, but my gosh, did ironSource have a great year on the back of the pandemic.

Israeli Startups and Marketing – 5 Questions with an Experienced CMO

When is the right time for a startup to bring on marketing? Are brand and storytelling important before product-market-fit? 

We asked Hila Shitrit Nissim*, an experienced CMO, to share her perspective on marketing in Israeli startups. Hila spent 12 years as the VP Marketing for Israeli venture capital fund Viola before embarking on an independent CMO career for startups.

The common case in israel is founding teams flying solo without a marketer until it’s imminently necessary. Do you think different categories or products require different timing in terms of adding on a marketer?

In my opinion, the sooner a marketer is brought on board, the better.

It does not need to be a full-time CMO, but someone who can bring the marketing perspective to everything you do in the early days is essential.  Being guided and supported in finding the product-market fit and experimenting with messaging can shorten time-to-market and save valuable resources.

Although this has been known for years for B2C companies, it is interesting to see B2B companies realizing the importance of marketing early on, as well. 

A marketer will help the founders to create the larger vision and story for the company, craft the desired brand essence and values, and explore various go-to-market approaches. These steps are vital to securing initial funding and attracting pilots, design partners, and customers. 

What’s the best advice or practical tips you have for founders with regards to marketing and branding at seed stage?

My advice is to talk to the market and to potential customers as early as possible and think about your company’s brand from day one. Many founders concentrate on perfecting their product, adding revolutionary features, and staying in stealth mode to avoid the competition. However, the earlier they talk to users and understand their pain points, the better the chances are of gaining traction and better positioning as they launch.
Every successful marketing strategy starts with a well-told story. Talking to your target audience gets you to that point. Among other tips I share, below is my favourite exercise

Try to answer these questions:

  1. Why should these people (buyers) care about our product?
  2. What makes our product so much better for their needs?
  3. How big is the problem we solve for them?

These are the first questions that will help you build the brand and create the right story for it. 

There’s a rise in community led startups. What best practices have you seen in Israel when it comes to community building?

There is an impressive pool of marketing talent in Israel, including brilliant community managers. Israelis are great at sharing experiences, tips, and encouraging and supporting one another and these are the basic elements of a strong community. Some of the largest communities on Facebook were created in Israel (i.e Supergirls, Hashavot, Hatochenistim and more) and this talent turned the best practices from social nonprofit communities into communities that cater to specific needs and business purposes. 

Companies that succeed in building a community have a great advantage in today’s world when users seek safe and supportive environments where they can also influence one another.  It also gives brands a way to differentiate themselves in a fragmented market, where traditional channels become very costly. 

What’s expected from a CMO today has changed from 10 years ago. Is there a marketing talent crunch?

The key change from a decade ago is the realisation by entrepreneurs that a great idea plus a strong technological foundation aren’t enough anymore. To grab people’s attention, you need to have a good narrative, build a professional website and collateral, be consistent and memorable, and creatively generate the demand for your solution while charging for it (hopefully at a premium rate). As a result, there is an increasing demand for strong marketing strategists and exceptional marketing professionals across all relevant domains – content, social media, user acquisition, SEO, creative and design, community management and more.

As a member of GCMO (a community of Israeli based CMOs from global successful companies) I see how attractive this field has become as we share dozens of new open positions every week. 

Hila Shitrit Nissim

* Hila Shitrit Nissim

Part time CMO for B2B and B2C startups.

With 20 years of marketing experience, Hila is passionate about building strong, meaningful brands and creating differentiated positioning in highly competitive markets. 

Linkedin profile: https://www.linkedin.com/in/hilashitritnissim/

The post Israeli Startups and Marketing – 5 Questions with an Experienced CMO appeared first on VC Cafe.

Investors Clara Brenner, Quin Garcia and Rachel Holt are coming to TC Sessions: Mobility 2021

The transportation industry is abuzz with upstarts, legacy automakers, suppliers and tech companies working on automated vehicle technology, digital platforms, electrification and robotics. Then there are shared mobility companies from cars to scooters and mopeds to ebikes. And who can forget the emerging air taxi companies?

At the center of this evolving industry are the investors. Simply put: TechCrunch can’t hold an event on mobility without hearing from the people who are hunting for the best opportunities in the industry and tracking all of its changes. That’s why we’re happy to announce investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital will join us on our virtual stage at TC Sessions: Mobility 2021. The virtual event, which features the best and brightest minds in the world of mobility, will be held on June 9.

p.s. Early Bird tickets to the show are now available – book today and save 35% before prices go up.

Brenner, Garcia and Holt will come on stage to discuss their near and long-term investment strategies, overlooked opportunities, and challenges that face startups trying to break into the transportation sector. They’ll lean on their considerable experience to provide the advice and insight that will help attendees understand the state of the industry and where it is headed.

Brenner is a serial co-founder. She is co-founder and managing partner of the Urban Innovation Fund, a venture capital firm that provides seed capital and regulatory support to entrepreneurs solving urban challenges. Urban Innovation Fund has backed curbflow, Electriphi and Kyte among others. She also co-founded Tumml, a startup hub for urban tech that provided 38 startups with seed funding and mentorship, and hosts events around urban innovation. In 2014, Forbes listed her as one of its “30 Under 30” for Social Entrepreneurship.

Garcia, a lifelong ‘car guy’ with an MS degree in management science and automotive engineering from Stanford University, is managing director at Autotech Ventures. He’s also a board director, board observer and advisory board member to a number of mobility companies including Lyft, Peloton Technology, and Connected Signals.

Garcia has been on the ground floor of startups, notably as part of the initial team at the electric vehicle infrastructure startup Better Place, where he was responsible for partnerships with automakers and parts suppliers while living in Israel, Japan and China.

Holt is co-founder and Managing Partner of early-stage venture firm Construct Capital, which is focused on finding founders that are trying to change foundational industries such as manufacturing and supply chain, logistics and transportation. The company’s transportation-focused investments include ChargeLab. Holt also sits on the board of MotoRefi.

Prior to Construct, Holt was at Uber, where she was one of the company’s first 30 employees. During her 8.5-year stint at Uber, Holt rose through the ranks of the company, including roles running the U.S.  and Canada “Rides” business as well as global marketing and customer support. She was a longtime member of the company’s executive leadership team. Her last position at Uber was leading the company’s new mobility organization, which focused on its e-bike and scooter businesses as well as running its incubator, which funded and developed new products and services.

Rachel began her career at Bain & Company, advising companies in the private equity, financial services and healthcare industries. She was ranked No. 9 on Fortune’s 40 under 40 and was named by Fast Company as One of the Most Creative People in Business.

We can’t wait to hear from this investor panel at TC Sessions: Mobility on June 9. Make sure to grab your Early Bird pass before May 6 to save 35% on tickets and join the fun!

Ex-General Catalyst and General Atlantic VC announces $68M debut fund

As of 2019, the majority of venture firms — 65% — still did not have a single female partner or GP at their firm, according to All Raise.

So naturally, anytime we hear of a new female-led fund, our ears perk up.

Today, New York-based Avid Ventures announced the launch of its $68 million debut venture capital fund. Addie Lerner — who was previously an investor with General Catalyst, General Atlantic and Goldman Sachs — founded Avid in 2020 with the goal of taking a hands-on approach to working with founders of early-stage startups in the United States, Europe and Israel.

“We believe investing in a founder’s company is a privilege to be earned,” she said.

Tali Vogelstein — a former investor at Bessemer Venture Partners — joined the firm as a founding investor soon after its launch and the pair were able to raise the capital in 10 months’ time during the 2020 pandemic.

The newly formed firm has an impressive list of LPs backing its debut effort. Schusterman Family Investments and the George Kaiser Family Foundation are its anchor LPs. Institutional investors include Foundry Group, General Catalyst, 14W, Slow Ventures and LocalGlobe/Latitude through its Basecamp initiative that backs emerging managers. 

Avid also has the support of 50 founders, entrepreneurs and investors as LPs — 40% of whom are female — including Mirror founder Brynn Putnam; Getty Images co-founder Jonathan Klein; founding partner of Acrew Capital Theresia Gouw and others.

Avid invests at the Series A and B stages, and so far has invested in Alloy, Nova Credit, Rapyd, Staircase, Nava and The Wing. Three of those companies have female founders — something Lerner said happened “quite naturally.”

“Diversity can happen and should happen more organically as opposed to quotas or mandates,” she added.

In making those deals, Avid partnered with top-tier firms such as Kleiner Perkins, Canapi Ventures, Zigg Capital and Thrive Capital. In general, Avid intentionally does not lead its first investments in startups, with its first checks typically being in the $500,000 to $1 million range. It preserves most of its capital for follow-on investments.

“We like to position ourselves to earn the right to write a bigger check in a future round,” Lerner told TechCrunch. 

In the case of Rapyd, Avid organized an SPV (special-purpose vehicle) to invest in the unicorn’s recent Series D. Lerner had previously backed the company’s Series B round while at General Catalyst and remains a board observer.

Prior to founding Avid, Lerner had helped deploy more than $450 million across 18 investments in software, fintech (Rapyd & Monzo) and consumer internet companies spanning North America, Europe and Israel. 

When it comes to sectors, Avid is particularly focused on backing early-stage fintech, consumer internet and software companies. The firm intends to invest in about 20 startups over a three-to-four year period.

“We want to take our time, so we can be as hands-on as we want to be,” Lerner said. “We’re not looking to back 80 companies. Our goal is to drive outstanding returns for our LPs.”

The firm views itself as an extension of its portfolio companies’ teams, serving as their “Outsourced Strategic CFO.” Lerner and Vogelstein also aim to provide the companies they work with strategic growth modeling, unit economics analysis, talent recruiting, customer introductions and business development support.

“We strive to build deep relationships early on and to prove our value well ahead of a prospective investment,” Lerner said. Avid takes its team’s prior data-driven experience to employ “a metrics-driven approach” so that a startup can “deeply understand” their unit economics. It also “gets in the trenches” alongside founders to help grow a company.

Ed Zimmerman, chair of Lowenstein Sandler LLP’s tech group in New York and adjunct professor of VC at Columbia Business School, is an Avid investor.

He told TechCrunch that because of his role in the venture community, he is often counsel to a company or fund and will run into former students in deals. Feedback from numerous people in his network point to Lerner being “extraordinarily thoughtful about deals,” with one entrepreneur describing her as “one of the smartest people she has met in a decade-plus in venture.”

“I’ve seen it myself in deals and then I’ve seen founders turn down very well branded funds to work with Addie,” Zimmerman added, noting they are impressed both by her intellect and integrity. “…Addie will find and win and be invited into great deals because she makes an indelible impression on the people who’ve worked with her and the data is remarkably consistent.”

LA-based Metropolis raises $41 million to upgrade parking infrastructure

Metropolis is a new Los Angeles-based startup that’s looking to compete with BMW-owned ParkMobile for a slice of the automated parking lot management market.

Upgrading parking with a computer vision-based system that recognizes cars as they enter and leave garages has been Metropolis’ mission since founder and chief executive Alex Israel first formed the business back in 2017.

Israel, a serial entrepreneur, has spent decades thinking about parking. His last company, ParkMe, was sold to Inrix back in 2015. And it was with those earnings and experience that Israel went back to the drawing board to develop a new kind of parking payment and management service.

Now, the company is ready for its closeup, announcing not only its launch, but $41 million in financing the company raised from investors, including the real estate managers Starwood and RXR Realty; Dick Costolo and Adam Bain’s 01 Advisors; Dragoneer; former Facebook employees Sam Lessin and Kevin Colleran’s Slow Ventures; Dan Doctoroff, the head of Alphabet’s Sidewalk Labs initiative; and NBA All Star and early-stage investor, Baron Davis. Global growth equity firm 3L led the round. 

According to Alex Israel, the parking payment application is the foundation for a bigger business empire that hopes to reimagine parking spaces as hubs for a broad array of urban mobility services.

In this, the company’s goals aren’t dissimilar from the Florida-based startup, REEF, which has its own spin on what to do with the existing infrastructure and footprint created by urban parking spaces. And REEF’s $700 million round of funding from last year shows there’s a lot of money to be made — or at least spent — in a parking lot.

Unlike REEF, Metropolis will remain focused on mobility, according to Israel. “How does parking change over the next 20 years as mobility shifts?” he asked. And he’s hoping that Metropolis will provide an answer. 

The company is hoping to use its latest funding to expand its footprint to more than 600 locations over the course of the next year. In all, Metropolis has raised $60 million since it was formed back in 2017.

While the computer vision and machine learning technology will serve as the company’s beachhead into parking lots, services like cleaning, charging, storage and logistics could all be part and parcel of the Metropolis offering going forward, Israel said. “We become the integrator [and] we also in some cases become the direct service provider,” Israel said.

The company already has 10,000 parking spots that it’s managing for big real estate owners, and Israel expects more property managers to flood to its service.

“[Big property owners] are not thinking about the infrastructure requirements that allow for the seamless access to these facilities,” Israel said. His technology can allow buildings to capture more value through other services like dynamic pricing and yield optimization as well.

“Metropolis is finding the highest and best use whether that be scooter charging, scooter storage, fleet storage, fleet logistics or sorting,” Israel said.  

 

Israel’s startup ecosystem powers ahead, amid a year of change

Released in 2011 “Start-up Nation: The Story of Israel’s Economic Miracle” was a book that laid claim to the idea that Israel was an unusual type of country. It had produced and was poised to produce, an enormous number of technology startups, given its relatively small size. The moniker became so ubiquitous, both at home and abroad, that “Israel Startup Nation” is now the name of the country’s professional cycling team.

But it’s been hard to argue against this position in the last ten years, as the country powered ahead, famously producing ground-breaking startups like Waze, which was eventually picked up by Google for over $1 billion in 2013. Waze’s 100 employees received about $1.2 million on average, the largest payout to employees in Israeli high tech at the time, and the exit created a pool of new entrepreneurs and angel investors ever since.

Israel’s heady mix of questioning culture, tradition of national military service, higher education, the widespread use of English, appetite for risk and team spirit makes for a fertile place for fast-moving companies to appear.

And while Israel doesn’t have a Silicon Valley, it named its high-tech cluster “Silicon Wadi” (‘wadi’ means dry desert river bed in Arabic and colloquial Hebrew).

Much of Israel’s high-tech industry has emerged from former members of the country’s elite military intelligence units such as the Unit 8200 Intelligence division. From age 13 Israel’s students are exposed to advanced computing studies, and the cultural push to go into tech is strong. Traditional professions attract low salaries compared to software professionals.

Israel’s startups industry began emerging in the late 19080s and early 1990s. A significant event came with acquisitor by AOL of the the ICQ messaging system developed by Mirabilis. The Yozma Programme (Hebrew for “initiative”) from the government, in 1993, was seminal: It offered attractive tax incentives to foreign VCs in Israel and promised to double any investment with funds from the government. This came decades ahead of most western governments.

It wasn’t long before venture capital firms started up and major tech companies like Microsoft, Google and Samsung have R&D centers and accelerators located in the country.

So how are they doing?

At the start of 2020, Israeli startups and technology companies were looking back on a good 2019. Over the last decade, startup funding for Israeli entrepreneurs had increased by 400%. In 2019 there was a 30% increase in startup funding and a 102% increase in M&A activity. The country was experiencing a 6-year upward funding trend. And in 2019 Bay Area investors put $1.4 billion into Israeli companies.

By the end of last year, the annual Israeli Tech Review 2020 showed that Israeli tech firms had raised a record $9.93 billion in 2020, up 27% year on year, in 578 transactions – but M&A deals had plunged.

Israeli startups closed out December 2020 by raising $768 million in funding. In December 2018 that figure was $230 million, in 2019 it was just under $200 million.

Late-stage companies drew in $8.33 billion, from $6.51 billion in 2019, and there were 20 deals over $100 million totaling $3.26 billion, compared to 18 totaling $2.62 billion in 2019.

Top IPOs among startups were Lemonade, an AI-based insurance firm, on the New York Stock Exchange; and life sciences firm Nanox which raised $165 million on the Nasdaq.

The winners in 2020 were cybersecurity, fintech and internet of things, with food tech cooing on strong. But while the country has become famous for its cybersecurity startups, AI now accounts for nearly half of all investments into Israeli startups. That said, every sector is experiencing growth. Investors are also now favoring companies that speak to the Covid-era, such as cybersecurity, ecommerce and remote technologies for work and healthcare.

There are currently over 30 tech companies in Israel that are valued over $1 Billion. And four startups passed the $1 billion valuation just last year: mobile game developer Moon Active; Cato Networks, a cloud-based enterprise security platform; Ride-hailing app developer Gett got $100 million ahead of its rumored IPO; and behavioral biometrics startup BioCatch.

And there was a reminder that Israel can produce truly ‘magical’ tech: Tel Aviv battery storage firm StorDot raised money from Samsung Ventures and Russian billionaire Roman Abramovich for its battery which can fully charge a motor scooter in five minutes.

Unfortunately, the coronavirus pandemic put a break on mergers and acquisitions in 2020, as the world economy closed down.

M&A was just $7.8 billion in 93 deals, compared to over $14.2 billion in 143 M&A deals in 2019. RestAR was acquired by American giant Unity; CloudEssence was acquired by a U.S. cyber company; and Kenshoo acquired Signals Analytics.

And in 2020, Israeli companies made 121 funding deals on the Tel Aviv Stock Exchange and global capital markets, raising a total of $6.55 billion, compared to $1.95 billion raised in capital markets in Israel and abroad in 2019, as IPOs became an attractive exit alternative.

However, early-round investments (Seed + A Rounds) slowed due to pandemic uncertainty, but picked-up again towards the end of the year. As in other countries in ‘Covid 2020’, VC tended to focus on existing portfolio companies.

Covid brought unexpected upsides: Israeli startups, usually facing longs flight to Europe or the US to raise larger rounds of funding, suddenly found that Zoom was bringing investors to them.

Israeli startups adapted extremely well in the Covid era and that doesn’t look like changing. Startup Snapshot found that 55% startups profiled had changed (or considered changing) their product due to Covid-19. Meanwhile, remote-working – which comes naturally to Israeli entrepreneurs – is ‘flattening’ the world, giving a great advantage to normally distant startup ecosystems like Israel’s.

Via Transportation raised $400 million in Q1. Next Insurance raised $250 million in Q3. Seven exit transactions with over the $500 million mark happened in Q1–Q3/2020, compared to 10 for all of 2019. These included Checkmarx for $1.1 billion and Moovit, also for a billion.

There are three main hubs for the Israeli tech scene, in order of size: Tel Aviv, Herzliya and Jerusalem.

Jerusalem’s economy and therefore startup scene suffered after the second Intifada (the Palestinian uprising that began in late September 2000 and ended around 2005). But today the city is far more stable, and is therefore attracting an increasing number of startups. And let’s not forget visual recognition company Mobileye, now worth $9.11 billion (£7 billion), came from Jerusalem.

Israel’s government is very supportive of it’s high-tech economy. When it noticed seed-stage startups were flagging, the Israel Innovation Authority (IIA) announced the launch of a new funding program to help seed-stage and early-stage startups, earmarking NIS 80 million ($25 million) for the project.

This will offer participating companies grants worth 40 percent of an investment round up to $1.1 million and 50 percent of a total investment round for startups in the country or whose founders come from under-represented communities – Arab-Israeli, ultra-Orthodox, and women – in the high-tech industry.

Investments in Israeli seed-stage startups decreased both absolutely and as a percentage of total investments in Israeli startups (to 6% from 11%). However, the decline may also be a function of large tech firms setting up incubation hubs to cut up and absorb talent.

Another notable aspect of Israel’s startups scene is its, sometimes halting, attempt to engage with its Arab Israeli population. Arab Israelis account for 20% of Israel’s population but are hugely underrepresented in the tech sector. The Hybrid Programme is designed to address this disparity.

It, and others like it, this are a reminder that Israel is geographically in the Middle East. Since the recent normalization pact between Israel and the UAE, relations with Arab states have begun to thaw. Indeed, Over 50,000 Israelis have visited the United Arab Emirates since the agreement.

In late November, Dubai-based DIFC FinTech Hive—the biggest financial innovation hub in the Middle East—signed a milestone agreement with Israel’s Fintech-Aviv. Both entities will now work together to facilitate the cross-border exchange of knowledge and business between Israel and the United Arab Emirates.

Perhaps it’s a sign that Israel is becoming more at ease with its place in the region? Certainly, both Israel’s tech scene and the Arab world’s is set to benefit from these more cordial relations.

Our Israel survey is here.

Eight Roads Ventures Europe shifts its gears towards diversity, appointing Lucile Cornet to Partner

The world of European VC can post another win for diversity this week as Lucile Cornet is appointed Partner with Eight Roads Ventures Europe, a firm focusing on startups in Europe and Israel. Cornet is its first female Partner. Eight Roads is backed by Fidelity and has over $6 billion assets under management globally.

Cornet will be focusing on the software and fintech sectors and previously led a number of investments for the firm, having risen from Associate to Partner within five years. It’s an out of the ordinary career trajectory when VC is notorious for having a ‘no succession’ culture, unless partners effectively buy into funds.

Cornet commented: “I am hugely optimistic about what is to come for European technology entrepreneurs. We are seeing more and more amazing founders and innovative businesses across the whole European region with ambitions and abilities to become global champions, and I look forward to helping them scale up.”

Speaking with TechCrunch, Cornet added: “I feel so, so fortunate because I think we’ve been living during a once in a lifetime transformation in general in tech and also in Europe. To build some of those companies, and just be part of the ecosystem has been fantastic. I know how much more exciting things are going to be in the next couple of years.”

Cornet previously led investments into Spendesk, the Paris-based spend management platform; Thinksurance, the Frankfurt-based B2B insurtech; and Compte-Nickel, one of the first European neobanks which was successfully acquired by BNP Paribas in 2017. She also sits on the boards of VIU Eyewear, OTA Insight and Fuse Universal.

France-born Cornet’s previous career includes investment banking, Summit Partners, and she joined Eight Roads Ventures in 2015. She was a ‘rising star’ at the GP Bullhound Investor of the Year Awards 2020.

Commenting, Davor Hebel, managing partner at Eight Roads Ventures Europe, said: “We are delighted with Lucile’s success so far at Eight Roads. She has made a huge impact in Europe and globally since joining the firm. She has a tremendous work ethic and drive… identifying the best European companies and helping them scale into global winners. Her promotion also speaks to our desire to continue to develop our best investment talent and promote from within.”

Speaking to me in an interview Hebel added: “We always believed in a slightly different approach and we say when we hire people, even from the start, we want them to have judgment, and we want them to have that presence when they meet entrepreneurs. So it was always part of the model for us to say, we might not hire many people, but we really want them to have the potential to grow and stay with us and have the path and the potential to do so.”

In 2020, Eight Roads Ventures Europe invested in Cazoo, Otrium, Spendesk, Odaseva and most recently Tibber, completed eight follow-on investments and exited Rimilia. The firm also saw its portfolio company AppsFlyer reach a $2 billion valuation.

K Health expands into virtual childcare and raises $132 million at a $1.5 billion valuation

K Health, the virtual health care provider that uses machine learning to lower the cost of care by providing the bulk of the company’s health assessments, is launching new tools for childcare on the heels of raising cash that values the company at $1.5 billion.

The $132 million round raised in December will help the company expand and help pay for upgrades including an integration with most electronic health records — an integration that’s expected by the second quarter.

Throughout 2020 K Health has leveraged its position operating at the intersection of machine learning and consumer healthcare to raised $222 million in a single year.

This appetite from investors shows how large the opportunity is in consumer healthcare as companies look to use technology to make care more affordable.

For K Health, that means a monthly subscription to its service of $9 for unlimited access to the service and physicians on the platform, as well as a $19 per-month virtual mental health offering and a $19 fee for a one-time urgent care consultation.

To patients and investors the pitch is that the data K Health has managed to acquire through partnerships with organizations like the Israel health maintenance organization Maccabi Healthcare Services, which gave up decades of anonymized data on patients and health outcomes to train K Health’s predictive algorithm, can assess patients and aid the in diagnoses for the company’s doctors.

In theory that means the company’s service essentially acts as a virtual primary care physician, holding a wealth of patient information that, when taken together, might be able to spot underlying medical conditions faster or provide a more holistic view into patient care.

For pharmaceutical companies that could mean insights into population health that could be potentially profitable avenues for drug discovery.

In practice, patients get what they pay for.

The company’s mental health offering uses medical doctors who are not licensed psychiatrists to perform their evaluations and assessments, according to one provider on the platform, which can lead to interactions with untrained physicians that can cause more harm than good.

While company chief executive Allon Bloch is likely correct in his assessment that most services can be performed remotely (Bloch puts the figure at 90%), they should be performed remotely by professionals who have the necessary training.

There are limits to how much heavy lifting an algorithm or a generalist should do when it comes to healthcare, and it appears that K Health wants to push those limits.

“Drug referrals, acute issues, prevention issues, most of those can be done remotely,” Bloch said. “There’s an opportunity to do much better and potentially cheaper. 

K Health has already seen hundreds of thousands of patients either through its urgent care offering or its subscription service and generated tens of millions in revenue in 2020, according to Bloch. He declined to disclose how many patients used the urgent care service vs. the monthly subscription offering.

Telemedicine companies, like other companies providing services remotely, have thrived during the pandemic. Teladoc and Amwell, two of the early pioneers in virtual medicine have seen their share prices soar. Companies like Hims, that provide prescriptions for elective conditions that aren’t necessarily covered by health, special purpose acquisition companies at valuations of $1.6 billion.

Backing K Health are a group of investors led by GGV Capital and Valor Equity Partners. Kaiser Permanente’s pension fund and the investment offices of the owners of 3G Capital (the Brazilian investment firm that owns Burger King and Kraft Heinz), along with 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup, also participated in the round. 

Organizations working with the company include Maccabi Healthcare; the Mayo Clinic, which is investigating virtual care models with the company; and Anthem, which has white labeled the K Health service and provides it to some of the insurer’s millions of members.