Flex sees Israel startups key to new tech strategy
Multinational electronics giant seeks to invest in or acquire companies with focus on health, IoT, virtual reality, auto tech
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
San Jose, California-based Flex, an electronics manufacturer, is scouting Israel’s tech scene to invest in and acquire Israeli startups.
The company, formerly called Flextronics, is one of the largest third-party manufacturers in the world, with 200,000 employees. Flex manufactures products for thousands of companies around the world and in Israel, making, for example, all the motherboards and network cards for Mellanox Technologies Ltd. as well as many components for global multinationals like Intel Corp. and GE Healthcare.
After rebranding as Flex in 2015, the company is looking to tap into Israeli technologies to help it transform itself from an electronics manufacturing services company to an end-to-end supplier of production services.
The new focus, said Michele Monico, Flex vice president of Design & Engineering for the EMEA region, is to work with customers in building smarter products for the connected world. And that is where Israel, with its technological edge, can play part.
“We are positioning ourselves as a tech partner and not just a manufacturing partner,” said Monico said in an interview in Tel Aviv. “Together with the US, Israel is the densest territory for the creation of new technologies, and that is why we are looking to expand our activities here.”
Half of Flex’s innovations come from Israel
Operating in Israel for more than 20 years, mostly under the radar, Flex has today become the nation’s second-largest tech employer after Intel Corp., counting 3,500 employees in six locations including an R&D center in Haifa that employs around 60 people. Today, half of Flex’s global innovation comes from Israel, Monico said.
The company plans to set up a second design center early next year in Haifa that will be “more than three times the current space,” he said.
A few years ago, the company set up a global investment arm with the aim of incubating and accelerating home-grown technologies.Over the past three to four years this investment arm has injected $20 million in 6 different Israeli startups. “Flex is planning to invest in about three Israeli companies a year, with an average investment totaling $500,000 to $1 million,” Monico said.
“We are looking to expand this activity because we saw good returns,” he said. “At the end of the day we are looking for added value to our core business. To position yourself as a tech partner you need to have that tech content in your pocket.”
Monico forecast Flex operations in Israel to grow by around 25 percent annually and said the focus of the company’s investments here would be in digital health, the Internet of Things, industrial technologies, artificial and virtual reality technologies and in the new field of auto technologies.
Flex works “with a lot of the leading OEM car manufacturing and focused on developing the technology for autonomous cars,” Monico said. “Israeli is a hotbed for innovation for Advanced Driver Assistance Systems (ADAS) and in particular around vision/imaging systems. We are working with some Israeli startups who specialize in this technology block.”
