Israel’s InvestiNation Is Here To Disrupt The VC Roadshow
By: Investable Universe
Tags: Venture Capital, Disruptive Innovation, Startup, Israel, Middle East

When this year’s covid-related social and economic disruptions put a halt to venture capital roadshows — the whirl of travel, meetings, pitch decks, handshaking and networking that are critical to startups seeking investors— one Israeli investment firm knew exactly what to do. They disrupted the venture capital roadshow itself.

The resulting platform, InvestiNation — a brainchild of Israeli-American real estate and technology investment firm Besadno Group‘s Founder and Chairman Eli Gross — has emerged this year as a kind of “virtual roadshow” for Israeli startups in proptech (commercial real estate technology), contech (construction technology), agtech (agriculture technology), and other emerging sub-sectors. Call it a disruptive startup of disruptive startups.

“There’s a lot of agility in the startup companies coming from Israel, and an entrepreneur’s mindset,” says Oded Eliashiv, CEO of InvestiNation (a serial entrepreneur many times over, who previously founded EPOS, a provider of advanced digital positioning technology to the PC peripheral, notebook and touch-screen markets). “This agility enables people and companies to provide solutions to what’s happening here and now in these pandemic times.”

How It Works

The platform is live and presently open to accredited investors, institutional investors and family offices in the United States, who can select from five live deals and a VC fund-of-funds in which InvestiNation is both partner and co-investor. The platform focuses on companies in the Seed-to-Round-A (early stage) period of development — Eliashiv notes that valuations of Israeli companies at these stages are typically lower than their counterparts in Silicon Valley or New York — with a view to scaling and on-ramping these companies specifically in the U.S. market.

InvestiNation also includes an interactive content and education platform, allowing registered investors to meet virtually with CEO’s for live, on-the-spot Q&A’s — possibly not-unlike TV’s “Shark Tank” — and view recorded events and webinars. Investination offers a presentation deck and one-pager for every portfolio company that is featured on the website, providing the same level of financial information that investors would have available to them if they were investing venture capital in physical time and space.

For those who are ready to seal the deal with a particular firm, the minimum investment size is $15,000, and investors should be prepared for a lockup period typical of venture capital investment — five to seven years — before exiting.

Startup Nation

Israel is home to 8300 active startups, more per capita in terms of number of investments (and monetary value, with the equivalent of $674 in venture capital for every citizen) than anywhere else in the world. In 2019 alone, Israeli exits totaled $21.7 billion — adding to $107 billion in exits over the last decade — and it logged an astounding $46 billion in high-tech exports (by comparison, the U.S. exported an estimated $338 billion in tech products and services in 2019, and Israel is only about the size of New Jersey).

This remarkable entrepreneurial streak has only intensified during covid. According to InvestiNation, 80 Israeli companies have been launched so far this year just to develop solutions to covid-19-related problems.

Portfolio companies on InvestiNation are diverse, but share a real-assets-meets-technology disruptive theme — part of this is in keeping with the specialized investment of Besadno Group, which invests in real estate and technology ventures, and already last fall launched a startup initiative, BuiltUp Ventures, to make seed and early-stage investments in kosher proptech startups — i.e., those operating according to Jewish religious law. It’s also an emerging sector that plays to Israel’s strengths.

”Proptech and contech [are] sectors in which you utilize existing technologies and package it in the right kind of business model that will be relevant for the real estate industry. All of these technologies are something that Israel is very well known for,” says Eliashiv.

Companies available for investment include real estate tokenizer SolidBlock, an Ethereum blockchain platform that enables trading of digital assets backed by physical real estate. SolidBlock worked in October 2018 with Indiegogo to launch the Aspen Coin, a digital token conveying fractional ownership in the St. Regis Aspen Resort, a tokenization campaign that raised $18 million.

Another, Ag-Sense, provides real-time tracking and protective solutions for location-based devices. Its potential use cases are unusually diverse, including IoT monitoring solutions for storage tanks (such as water, fuel, urea, fertilizer and sewage tanks, which are often targeted for theft), protective systems for agriculture tools/machinery, construction equipment, off-road vehicles, and even security for ATM banking machine.

A third offering, the construction/fintech hybrid StructShare, makes software that allows specialty contractors to connect with vendors and streamline the entire purchasing cycle, from planning through field orders, POs and deliveries, to an automatic account payable process.

Stay Tuned

While much of Israel’s Startup Nation may come down to a collective national fervor, Oded Eliashiv notes that Israel’s government plays a big part in fostering startups, particularly through the Israel Innovation Authority: a government agency that actually vets startups through an extensive due diligence process, and invests non-dilutive capital in selected companies.

Add to that the discipline and resourcefulness of compulsory military service for most Israelis, and a history that has compelled them to come up with their own solutions, dating even back to Israel’s founding years and throughout periods of geopolitical isolation.

With that in mind, the recent signing of the Abraham Accords and normalization of diplomatic relations between Israel, the United Arab Emirates and Bahrain may bring even more good news to the Israeli startup ecosystem. According to Oded Eliashiv, InvestiNation has been developing a number of strategic relationships in the Gulf States, with firms that are “very keen on Israeli technology” — particularly in real estate. To that end, Investination will be leading a delegation to Dubai early next month with five or six startups to take part in several events with an interesting lineup of partners and potential investors.

And for the entrepreneurs out there — whether physically domiciled in Israel, or Israeli-inspired — InvestiNation is always on the lookout for new startups.