Israel’s postal service seeks tech to shed snail-mail image

Much-maligned company calls on startups to use it as testing ground for their products, and plans to set up innovation center to improve operations

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

A postal worker stands in the selection hall at a post office in Tel Aviv February, 22, 2010. (Yossi Zeliger/Flash 90)
A postal worker stands in the selection hall at a post office in Tel Aviv February, 22, 2010. (Yossi Zeliger/Flash 90)

Israel’s postal service is looking to undergo a modernization makeover by calling on startups to test out their technologies within the state-owned company, which has often been criticized for poor service to consumers, with long lines at service centers and letters arriving late or not at all.

The aim is to create an infrastructure of advanced solutions that will help the firm in its core operations, logistics, online trading and financial services, the Israel Postal Company said in a statement last week.

The postal company will also set up an innovation center for technological entrepreneurship, which will open in Tel Aviv in the coming months, the statement said.

The two initiatives are the first in a series of business collaborations the postal company is seeking to set up with industries, based on the idea that the postal infrastructure can serve as a platform for the development of innovations that stem from the nation’s tech ecosystem.

The cooperation with the startup companies will focus on and support the development of products and ventures in areas relevant to the company’s future operations, the statement said, including online trading, advanced financial services, logistics and smart transportation, artificial intelligence, internet of things (IoT), improving service and client experience, queuing and demand management, cybersecurity, information security and blockchain technologies.

As part of the plan, the Israel Postal Company will offer startups access to the postal infrastructure, including its data and nationwide branches, as well as experts from a variety of fields, parallel corporations in Israel and abroad, and academia.

The chosen startups will begin pilot projects with the Postal Company, and at the end of each project the technology will be assessed to see if the solutions can be implemented into the company’s service and/or investment in the startup should be made.

The initiative comes as Israel has set out plans to privatize its state-owned postal services after years in which the company has been suffering from a drop in profitability and cash flow and from increased competition from alternative services.

In July, a ministerial committee in charge of the privatization of government-held companies approved the sale of a 40 percent stake in the firm. An initial 20% stake will be sold via a private tender to a strategic investor in Israel or abroad. The remaining 20% stake will be sold off, within two years of the sale of the initial tranche, in a public offering on the Tel Aviv Stock Exchange.

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