Italy’s Enel sets up Tel Aviv hub to tap new tech
Israeli Economy Ministry to match funds provided to startups by Italian electricity company
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Amid a splash of white wine, chilled beers in tubs of ice, finger foods and salads and a delegation of impeccably clad and shod employees, Italy’s Enel, a multinational energy producer, opened its innovation hub in Tel Aviv on Monday.
The hub, the first and the largest to be launched by an Italian company in Israel, will foster up to 20 local startup candidates each year that have the potential to develop products and services with business and social impact, the company said.
By fostering collaborations between public partners, private corporations and funds, Enel aims to become an “industrial partner” for the best startups and act as a bridge for their technologies between Israel and the rest of the world, the company said.
Enel, which is Europe’s largest utility by market capitalization, will provide these companies with the engineering and technological expertise “to promote new uses for energy, new ways of managing and delivering energy access to more people,” Enel’s chief executive officer Francesco Starace said at a press conference held at the premises of the new hub.
“Israel is one of the world’s most innovative countries in which every year hundreds of interesting startups are launched. I am confident that our presence in this country will help us to accelerate the innovation of the energy industry.”
The hub has been set up together with SOSA and The Junction, two Israeli initiatives to promote the local startup industry. Their executives will be on the ground scouting for technologies for the Italian giant, which has also appointed a local representative to act on its behalf.
“We aim to see 300 to 400 new companies together every year and select 20 of these and work closely with them,” Jonathan Saacks, managing partner at the VC fund Genesis Partners and a co-founder of SOSA said at the launch of the hub. Hopefully three to five of these a year will be chosen to be “commercial pilots” within Enel, he said. The aim is to build a “correct DNA that will enable bridging the gap between Israeli technology and global companies.”
The start-ups will be selected by an advisory board made up of Enel senior executives that will evaluate business potential and strategic fit with the group’s needs. Each startup collaborating with Enel “will work with an internal champion” that will facilitate the relationship with the global business lines and the group’s market units, the utility said in a statement.
The selected startups will also benefit from mentorship provided by Enel, SOSA & The Junction senior executives, a space in which to work, test-beds to improve their solutions, the possibility to run pilot projects in the markets where Enel has a presence and access to Enel sales channels that reach millions of customers everyday, Enel said.
Startups working with Enel will have the chance to receive further financing from the Israeli Economy Ministry that, according to an agreement in place with Enel, will provide funding equal to the value of Enel’s support, the statement said.
Enel said it plans to take an active role in Israel’s technology ecosystem, fostering collaboration with universities, venture capital funds, institutions and other corporations “in order to feed and enrich the Israeli innovation network and to link it to the other ecosystems in which Enel takes part.”
Talks have already started with dozens of startups, SOSA’s Saacks said on the sidelines of the event, and the team will be looking for a whole spectrum of technologies, from cyber security to big data, smart metering, digital technology and analytics, he said.
“Everyone industry needs technology these days,” Saacks said. “The key is to understand what these are and many times startups don’t understand the market. They need to understand the need.”
Starace said that innovation is the key to growth for a company like Enel. “We need to find ways to make electricity more diffused around the world,” Starace said at the sidelines of the conference. Electric cars are just one example, he said. They are a huge area of interest “and for us it is just a battery on wheels.”
The utility giant is interested in developments that can store energy for use in cooking, heating, cars or mass transportation, he said.
Enel plans to set up two similar incubators in Palo Alto, California, and Singapore, Starace said.
Saul Singer, co-author of the book “Start-up Nation,” said Enel’s presence in Israel should not “be taken for granted. Big companies generally go to a place to find a market or trading partners. Israel has no market and is no regional hub.”
Companies like Enel, Google, Apple and Microsoft are all in Israel, he said, because they are searching not for trading partners but innovation partners. “Start-ups are good at innovation but find it hard to grow. Big companies are good at growing but find it hard to innovate,” he said. The key is to let startups know what the problems are and enable them to connect with the big companies, Singer said.
After chatting with entrepreneurs and other guests at the party, Enel’s Starace and his team took in the view of Tel Aviv’s skyline from a sun-drenched terrace at the top of the building, laughingly snapped a quick team selfie, and took off for the airport.
