Corporate giants Microsoft Ventures, a unit of China’s HNA, India’s Tata, GE Ventures and Qualcomm Ventures will join forces with Tel Aviv University and Israel’s Pitango Venture Capital to set up a new $20 million fund to invest in Israeli startups that are developing Internet of Things (IOT) technologies, the university said.
The new consortium will be called Israel IoT Innovations – i3 Equity Partners (“i3”). It was set up by the five corporations together with Pitango and the Tel Aviv University, via its RAMOT technology transfer company. The aim is to invest in early-stage Israeli ventures and help them develop into entities playing in the global arena, the statement said.
Tapping into the know-how of the Israeli tech industry will also help the consortium members grow their business in IoT, which is already penetrating and changing many areas of human life, according to the statement.
The new initiative “will be the first stop for IoT-related startups looking to access the main global players in the IoT space,” said i3 managing partner Noga Kap. “With our unique and proprietary network we will look for entrepreneurs who are adapting to changing markets in the IoT domain, and creating products that matter. Leveraging our partners’ strategic experience and extensive IoT industry connections, we will provide our portfolio companies with the resources they need to build great businesses.”
The i3 collaboration plans to fund three to five high-potential seed and pre-seed startups annually with a financial investment of up to $1 million each. Selected companies will also benefit from technology, tools, mentoring, business development and other services, the statement said.
The companies will also benefit from the support of the multinational corporations for technology validation, design, proof-of-concept, later-stage investments, and ultimately the purchase of mature technologies and their distribution in high-potential markets – including China and India.
The i3 venture will be located at Tel Aviv University, enabling startups to be close to the campus with its multiple research and service centers.
The Internet of Things industry – which injects connectivity and software into objects and appliances, is poised to see nearly $3.7 billion in funding globally this year, New York data company CB Insights said in an October report, compared to $1.4 billion in 2012 and $3.5 billion in 2015. Corporate investors as well as VC funds have piled money into startups, with GE Ventures among the top investors in the field.
HNA Eco-Tech, a subsidiary of China’s HNA, is a high-tech holding group which specializes in cloud, big data and IoT technologies. India’s Tata is a global multi-industry enterprise including over 100 companies.
“This one-of-a-kind collaboration of some of the world’s largest corporations with Israel’s leading academic institution and largest venture capital fund is a testament to their trust in the ability of Israeli entrepreneurs to come up with the next big thing that will transform our world,” said i3 chairman Shlomo Nimrodi, who is also the CEO of RAMOT.