Eight Israeli startups will be virtually attending a tech conference in Arizona later this month, presenting their wares — from chainless hydraulic bikes to smart-air quality platforms — to potential investors and hoping to secure funding that will also help them overcome the coronavirus crisis.
The UNMET conference, co-hosted by the Arizona Commerce Authority and Stout Street Capital, is scheduled to attract more than 150 “of the fastest growing Seed and Series A stage” tech firms from middle America, according to the conference website. The founders will be able to pitch their firms to more than 150 institutions and VC investors from around the nation through one on one virtual meetings.
The May 12-14 conference was originally supposed to be held live, but changed its format to a virtual, online event because of the pandemic.
“I was planning to be in Arizona with a delegation of companies from Israel,” said David Yaari, who’s in charge of the new Arizona-Israel Trade and Investment Office.
The conference was created with the recognition that in the US almost the entire tech industry is concentrated in Silicon Valley and around New York, and there is an “unmet need” for identifying startup activity and entrepreneurship across middle America, Yaari explained.
The one-to-one virtual matching between investors and startups will expose the Israeli companies to a greater variety of investors and provide greater access to capital, he said, especially now that the coronavirus pandemic is making it harder for startups to raise funds.
Four out of every 10 startups will die in the next three months if they don’t raise additional funds, according to a report by research firm Startup Genome that looked into the impact of COVID-19 on startup ecosystems around the globe. The coronavirus lockdown is expected to trigger a drop of some 25% in private capital investments in Israeli startups, according the the Israel Innovation Authority.
“Helping Israeli companies access new markets for capital can help ensure their capacity to survive and be viable long term,” Yaari said. “The more we can do to diversify the capital base of Israeli companies and the startup community, the better.
“Investors still have money they need to invest. So, while things are more challenging and people are being cautious, their investment mandate has not stopped.”
Among the companies that will participate in the conference are ConfirmU, a B2B2C company that uses a two-minute quest game to enable lenders to underwrite people with no credit history; VizibleZone, which turns pedestrians’ cellphones into devices that can alert drivers of their presence; AuraAir, which has developed air quality technology that cleanses and disinfects indoor air in real time; and B.C. Bike, which has developed a chainless hydraulic bike.
“This is the first year in the history of that conference that they opened it up to Israeli companies, because it is being held in Arizona,” said Yaari, whose office worked to get the Israeli firms included in the event. “This will be good both for the startups as well as the investors who will be exposed to their technologies,” he said.
The governor of Arizona, Doug Ducey, has made it a priority to build up Arizona as a Startup State, Yaari said in an interview last year, and Israel is a “perfect match” to accomplish that aim, he said.
The coronavirus which has killed hundreds of thousands of people around the world, has put a focus on healthcare technologies and the many services that have moved or are moving online. This presents an opportunity for Israeli digital health and life sciences firms, as Arizona has been working to become a center for testing and piloting health technologies.
“The governor and the Arizona Commerce Authority are making Arizona a great place for startups,” Yaari said. “The governor has made it clear that he wants to remove bureaucracy.”
A few years ago, Arizona took steps to entice entrepreneurs from the financial and property technologies sectors by setting up dedicated sandboxes in which state agencies work with entrepreneurs and their startups to test technologies and bring their products to market, amid reduced regulatory requirements. Now a digital health sandbox will be set up as well, Yaari said.
This sandbox will offer startups, including Israeli tech firms, the chance to test, prove and pilot their technologies, by providing them with much needed data, Yaari said.
“One of the big challenges for Israeli companies is that they don’t have access to data,” he said. “Arizona is committed to be able to be the state to offer Israeli companies a receptive ground.”
Plans on hold
The trade investment office, launched last year, in addition to encouraging trade between Israel and the state of Arizona seeks to promote partnerships and help Israeli firms set up a base in Arizona. The office has been encouraging Israeli firms to set up premises in the US state, as a gateway to penetrate other US states and Mexico.
A variety of Israel-based companies already have operations in Arizona, including Mobileye, a maker of self-driving technologies acquired by Intel Corp. in 2017; Universal Avionics Corp., a unit of defense firm Elbit Systems Ltd.; Keter Group, a maker of plastic-based household and garden products; 3D printer maker Stratasys; and business analytics firm Sisense. Online insurer Lemonade launched services in Arizona in May 2018.
There are additional companies who are at a “very advanced stage” in setting up operations in Arizona, but whose plans have been delayed by the coronavirus pandemic, Yaari said.
“In addition to ongoing activities to advance Israeli companies and help develop pilots for Israeli startup companies, there are two specific companies that have located and negotiated on a site in Arizona, but then progress was put on hold” due to the pandemic, Yaari said. One of them is an aerospace firm and the other a healthcare firm. Their intention was to set up production facilities.
Yaari said he anticipates talks will resume again in late May or early June or as soon as the lockdowns are over.