The Golden Age of Israeli Startups: Product Innovation (Part IV)

In the previous parts of “The Golden Age of Israeli Start ups” we covered the state of the venture capital industry in Israel, some of the most recent venture funded companies and the M&A activity of Israeli companies. None of the above matter, without compelling products that solve a user’s need. Innovation is the propagator of this whole industry: companies create innovative products/ IP > venture capital investors provide the funding > companies start looking for an exit > international corporations see the potential and buy the company. So, it seems that it all starts from an idea.

It’s no wonder then, that Israeli venture raising in Q1 of 2008 has reached $617 million, the highest level in seven years according to IVC’s latest report. Ninety-six companies attracted more than $1 million each. Israeli VCs accounted for 43% of the total capital raised. First investment averaged $2.6 Million and the size of follow on round was on average $1.2 million.

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According to Zeev Holtzman, Chairman of IVC Research Center and Giza Venture Capital:

“A relatively high number of high-tech companies took advantage of the momentum built up in 2007 and raised significant capital based to the premise that ‘one should raise money when one can and not when it’s needed.’ Capital raising activity will probably moderate in upcoming quarters. Yet, we expect that the $1.6 billion average investment level of the last few years will be maintained in 2008.”

Below is a short overview of recent product releases by Israeli startups, let’s give them a hand:

1ply.pngMicrosoft names PLYmedia as Israel’s Most Promising Internet Startup of 2008

PLYmedia won first place in a competition held by Microsoft Innovation Lab together with Vertex VC and TheMarker financial magazine on April 15th. The selection criteria were based on a company’s innovation, new business models and “go to market” strategy. With dozens of customers around the world and reaching over 700 million potential views per month, PLY Media has launched a wide range of applications via its open platform. Any video site can now enjoy enriched viewer experience and new revenue models for its video assets. (learn more on VC Cafe)

Jajah Telephony Lands Yahoo as First Client

Having already integrated its VoIP services with a number of web-based social networks and other applications, Jajah is ready to take things to the next level. A partnership with Jangl revved up the infrastructure and implementation capabilities for both VoIP services, and an ad network has been the cherry on top of Jajah’s year in culmination. But Jajah isn’t stopping there. In launching its new Managed Services, which is a turnkey telephony service that includes network services to billing, according to Alec Saunders. The new Managed Services offering is scheduled to launch tomorrow, and has Yahoo as its first client. (learn more on VC Cafe)

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fring1sml.jpgFring Brings VOIP to the iPhone

Israeli startup Fring has developed a great VOIP/Chat service for mobile phones. According to Fring’s blog, the product was developed in conjunction with the Holon Institute of Technology academic research labs. The iPhone application enables access the fring, Skype, MSN Messenger, Google Talk, ICQ, SIP, Twitter, Yahoo and AIM services. The only caveat for this technology is the requirement for an “unlocked” iPhone, which means that users who want to have VOIP chat on their phones will need to download the Jailbreak Installer as well. Want to give it a spin? Download the Fring app at the Fringcubator. More on TechCrunch. (learn more on VC Cafe)

The 15th Annual High-Tech Innovation Awards Chooses PineApp as Product of the Year Finalistpineapplogon.jpg

PineApp announced today that its Mail-SeCure perimeter security appliance has been named a 2008 AeA High-Tech Innovation Awards finalist for Product of the Year in the Systems Hardware category. PineApp’s Mail-SeCure platform is anti-spam and email security appliance that combats evolving email-based threats such as botnets, image and MP3-based spam and sophisticated virus attacks. PineApp was founded five years ago and it is headquartered in Israel, with presence in 50 countries worldwide.

adaptvlaunc1.pngAdap TV launches OneSource

Adap.tv started 1.5 years ago. During that time Amir and his team learned a lot about online video, video advertising, and issues that face the video publishers. In their own words: “publishers are struggling to find a simple and effective way to monetize their video content while maintaining control over the viewing experience.” One Source, Adap TV’s newest product lets publishers minimize the number of ad networks they work with, but they still want to find the best possible ad for every video played (Both in content and in format). With supply from the 50 leading ad networks (including Google), strong classification technology and content rating, Adap.tv is able to provide the best online video yield.

Build a flash website in two minutes with Wix

A few days ago, Techcrunch covered the release of the new Wix site, a flash-based website and widget creation tool with plenty of rich media features.

mytopoa_-logomed.pngMytopia – Brother and Sister Create Virtual World

This American-Israeli casual gaming startup can teach a lesson about successful distribution strategy. Mytopia calls itself “the world’s first online social gaming community where people can play casual, timeless games together in real time, from every corner of the web”. Mytopia launched about a month ago, and was simultaneously available across social networks (Facebook , MySpace, Bebo, Orkut and Hi5) and major web and desktop widgets: iGoogle Gadgets, Apple Dashboard Widgets, Yahoo Widgets and Windows Vista Toolbar Widgets.

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The games work across all of these platforms, so a user on Facebook can play against someone on Bebo seamlessly. Mytopia was founded by a young Israeli American, Guy Ben-Artzi, and his sister Galia Ben-Artzi. Nearly all the company’s engineers are in Israel. In May, the startup plans to open up its casual gaming platform to other developers. By delivering this write-once, deploy-anywhere capability, it hopes to challenge other social gaming networks with platform ambitions such as Zynga and SGN. Founded in 2007, Mytopia is based in Petach Tikva Israel and has a headcount of 29.

configit.gifConfigIt makes better drivers through video games

CogniFit, an Israeli company specializing in cognitive training software, has developed DriveFit, a program that will test mental agility and then use subsequent computer training sessions to improve a driver’s skills. DriveFit uses visual and memory tests to measure 12 driving-related cognitive abilities. It assesses reaction times, as well as a person’s propensity to take risks, ability to judge relative speed and process information when attention is divided (for example, driving while talking on a cellphone)

human-eyeshe_white_logo.gifHumanEyes Technologies To Launch Producer3D – A New Revolution In Lenticular Printing At Drupa 2008

Israeli company HumanEyes technologies makes two-dimensional photographs into perfectly printed 3D images. The company has been around since 2000, but the latest release is noteworthy. Stay tuned.

smarttcp.jpgSmartTCP is Teaching Robots to do their Job

SmartTCP has developed a new software called SmartTCPArc that can teach manufacturing systems specific tasks easily and quickly. The company has developed a technology that programs industrial robots to do complex tasks, such as arc welding, cutting, grinding and drilling, in a matter of minutes. According to CEO Efi Lebel, his company can train a robot in 17 minutes. Watch the video.

inner-active_logo.pngMobile content start-up innerActive in European launchinner-active-phone.png

innerActive Smart Media Ltd. will shortly begin marketing in Belgium and the Netherlands a cellular contehttp://www.vccafe.com/wp-content/uploads/2008/04/inner-active-phone.pngnt channel financed by advertising and Italian content provider. innerActive enables users to obtain entertainment content for free in exchange for exposure to advertising. The company’s revenue is based on exposure and the number of hits, the same model used in online advertising. In Israel, the company has provided content for Cellcom Israel since October 2007 and is in negotiations with other cellular operators. See demos here. The company was founded by Ziv Elul and Offer Yehudai, both selected by the Marker magazine as some of the most promising young entrepreneurs in Israel.

unisfair1.gifUnisfair releases version 2.0 for virtual events

Virtual Events for Business 2.0 enables Unisfair to seamlessly integrate with, and accommodate add-ins from, third-party solutions including sales force automation tools like Salesforce.com, webcasting and virtual hosts. Additionally, it delivers several new designs for virtual environments, virtual booths and even virtual booth representatives. The new release includes professional networking:, e commerce and multi language events. According to Guy Piekarz, CEO of Unisfair, over half a million people attended the 400+ virtual events hosted by the company.

tunewikilogo.jpgBenchmark invests in Israeli startup that provides song lyrics

Israeli startup TuneWiki delivers user generated song lyrics to music playing on a PC or mobile device. The service, which was launched in December 2007, became a hit with “hundreds of thousands” of downloads to jailbroken iPhones alone (according to TechCrunch). The killer app of TuneWiki is that it synchronizes lyrics (karaoke style) to music playing on the iPhone. TuneWiki was founded by serial entrepreneurs Amnon Sarig and Rani Cohen.
See Demo:

kontera1.pngIsraeli start-up Kontera Inks LinkedIn deal

Kontera, a provider of In-Text solutions for web publishers and advertisers, announced an advertising partnership with Microsoft and LinkedIn. According to the deal terms, Kontera will provide the in-text advertising solution which provides related content as a user hovers on top of a highlighted keyword. The content will be provided from MSFT’s sites. Kontera competes with Vibrant Media and is led by CEO Yoav Shalom.

gizmox.pngGizmox widens Microsoft collaboration

Web application design start-up Gizmox Ltd. will extend its collaboration with Microsoft by joining Microsoft’s Visual Studio environment development partnership program, a program that enables companies and products that complement Microsoft technology to be integrated in Microsoft development systems. Last December, Gizmox raised $1 million at a value of $5 million after money. Maayan Ventures, Gizmox’s main shareholder, said the company would launch the first commercial version of its software in the coming months. Gizmox is currently offering its Beta version, which it says has recorded 200,000 downloads so far. See the demos and download the software for free.

Israel’s Tjat supplies pain-free cellphone to email access

tjat.pngTJat’s online-based system (accessed through the company’s web site) lets people connect directly and efficiently to any email service, including popular ones like Gmail, Yahoo or Hotmail. Based in Tel Aviv, Tjat was founded in 2004 as a garage startup, by CEO Gideon Drori.

sandisk.pngSandisk reveals a 4 Giga flash drive for $60

Just when it was becoming really difficult to get excited about U.S.B. thumb drives, SanDisk unveils the Cruzer Titanium Plus. This four-gigabyte drive automatically copies its entire contents to an online backup location, ensuring that even if the drive is lost, you still have your precious data. The drive costs $60 and includes six months of free backup service at BeInSync.com; after that the service costs $30 a year.

3dvu_new_logo_2.gif3DVU Signs Deal with Orange for off-board navigation

3DVU, an Israel-based company specializing in navigation software with realistic aerial imagery and terrain elevation, signed an agreement with Orange UK. According to the agreement, 3DVU will provide the off-board navigation solution Navi2GO on its online shop for a four month introductory subscription of £15.

worklight.pngWorkLight Enables Web 2.0 Mashups

Do you wish your business applications were more like Facebook or a gadget? WorkLight brings Web 2.0 inside the enterprise by letting users mash up information from CRM and ERP systems with consumer apps such as RSS feeds, Facebook, and iGoogle–while also maintaining IT security controls. WorkLight combines consumer apps with corporate data and security controls so companies can leverage that innovation while letting employees use familiar products. To date, Worklight has raised $5.1 million in 2006 from Genesis Partners, Index Ventures and Shlomo Kramer.

Finishing up on a humorous note…

pmate.pngBridging the gap between the sexes with P-Mate

This is no joke. The P-Mate is “The unique and original P-Mate which enables woman to pee while standing up.”
Designed for ‘urgency’ , the P-mate is a device made of recycled carton in the shape of a cone. In Europe the patent has been in use for years, and in the past year it’s making way to Israel in AM:PM convenience stores and music concerts. I’ll let you see for yourself… (more in on Haaretz in Hebrew)

The breadth and depth of Israeli high tech product releases goes far beyond this post, and it updates quickly. Please contact me with your latest product releases or undiscovered Israeli startups. This concludes the series Golden Age of Israeli Startups.

Eze Vidra
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Eze Vidra

Chief Innovation Officer at Antidote
Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Ezewas a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.
Eze Vidra
Follow me

Eze Vidra

Eze is the Chief Innovation Officer at Antidote, a startup helping patients search and match to clinical trial, to accelerate medical breakthroughs. Previously, Eze was a General Partner at Google Ventures Europe. Before GV, Eze founded and led Campus London, Google's first physical hub for startups, and was the Head Google for Entrepreneurs in Europe. He's an experienced product manager and startup mentor. In 2012 Eze founded Techbikers, a non-for profit supporting children education in developing countries.

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