Three Israeli start-ups have a shot at winning the million-dollar prize at China’s Shengjing Global Innovation Awards 2015 in Beijing this summer and present their technology to such Chinese tech giants as Alibaba, Baidu and Xiaomi.
“The competition is part of a new strategic cooperation between Jerusalem Venture Partners (JVP) and Shengjing to promote investment in Israeli star-tups and to promote Israeli start-ups in the Chinese market,” said JVP Managing Partner Kobi Rozengarten. “Israel creates leading companies in technological development and innovation, and that is exactly what the Chinese are looking for.”
The Shengjing Group and its venture capital arm, the Shengjing Fund of Funds, is working with JVP to bring more Israeli start-ups to China, and the competition is a way for Shengjing to introduce large Chinese corporations to new technology.
“We came to Israel for the first time two years ago, and we knew almost nothing about the country, other than it had some good potential technology,” said Xueling Cao, Director of the Shengjing Group and Shengjing Fund of Funds. “Now we realize the level of Israeli innovation, and how important partnering with Israel is.”
The three companies, chosen out of 180 start-ups that applied to competition when it was announced in January, will be among 20 that will compete for the million-dollar grand prize, as well as smaller awards, during the August event in the Chinese capital.
The finals will be part of the Zhongguancun International Entrepreneur Festival, and all 20 companies in the contest will, as part of the competition, travel throughout China to meet executives from top companies. The event is expected to receive extensive coverage from CCTV, China’s national TV network.
The finalists were announced at a ceremony in Tel Aviv Tuesday night.
Along with JVP, the Israeli segment of the competition will be led by JVP along with Deutsche Telecom, EMC, Yissum (the Hebrew University technology transfer company), the Herliya Interdisciplinary Center and the Herzog Fox & Neeman law firm.
The three Israeli start-ups chosen to compete include SecuriThings, an Internet of Things security platform, which can integrate with IoT manufacturers and platforms to protect against illegal access to devices; DiaCardio, a medical technology start-up which has developed FDA and CE-approved algorithms to accurately and automatically evaluate whether the heart is functioning as it should; and Wayerz, a financial technology firm that provides an integrated platform that optimizes international wiring, correspondent inter-bank reporting and reconciliation.
It’s no accident that these three companies were chosen, according to Sherrie Wang, Senior Partner at Shengjing; all three of these areas are important to China’s economic future.
“This competition is very important for us because it connects us directly to the Israeli start-up industry and brings the start-ups directly to China,” said Wang. “Many Chinese investors joined in on the initiative after hearing that Israeli start-ups would be coming to China. Opportunities for these Israelis in China are enormous and we will open doors for them.”
China thinks so highly of local tech that Israel is considered a region by itself for the purposes of the contest – just like Europe, Latin America and the US, and while the contest is global, Xueling said she is very hopeful that an Israeli company wins the contest. Even if Israeli start-ups don’t win, however, they will be able to take advantage of a $50 million venture capital fund Shengjing will be setting up (via its Fund of Funds program), “to actualize our vision of taking Israeli technology global.”
Of course, doing business in China is always going to be a challenge, said Rozengarten. There are risks in doing business with China, but the rewards are worth the risks.
After observing the difficulties many American firms had working with China, many Israeli entrepreneurs were initially wary of getting too close to the Asian giant, Rozengarten said. “American firms tried very hard to make a go of it in China and many were unable to, losing money or failing to attract customers, mostly because they couldn’t get Chinese partners to cooperate with them.”
That, Rozengarten said, was the result of the failure of American firms to understand China.
“The American firms tried to reach Chinese consumers directly, competing with the locals on their own turf,” he said. “Israel doesn’t have this problem; most of Israel’s involvement is on a business to business level, working with Chinese manufacturers or tech firms to improve their technology and services.” That, Rozengarten added, is the kind of cooperation the Chinese want – and need.
“For the Chinese, it’s all about business, and we have the technology that can help them. That’s why they come here, and that’s a big opportunity for us,” he said.