Samsung Global Innovation Center (GIC), part of Samsung Electronics, opened on Sunday a branch in Tel Aviv to invest in Israeli start-ups and entrepreneurs with a focus on software development.
Called Samsung NEXT, the Tel Aviv office follows similar ones set up in South Korea, San Francisco and New York by the South Korean conglomerate in an effort to stay ahead of competition by entering into early-stage technologies.
“In Israel you have perhaps the greatest amount of talent per square foot than anywhere in the world,” said Kai Bond, the general manager of Samsung GIC New York at the opening of the offices at Tel Aviv’s Sarona complex. “If you want to leapfrog competition you can’t wait to play in an established market.”
Samsung NEXT Tel Aviv will invest and work with start-ups at every stage of development through incubation, investment from seed to Series B, acquisition and partnership, Eyal Miller, Managing Director and CEO of Samsung NEXT Tel Aviv, said at a press conference. The idea is to get projects off the ground, help them grow and get them ready for an acquisition by Samsung or any other exit that best suits the companies, he said.
Samsung NEXT Tel Aviv will focus primarily in such areas as artificial intelligence, cybersecurity, virtual and augmented reality technologies, the Internet of Things, and big data technologies.
“Samsung is known for its hardware,” Miller said, “but we want to build a significant center for investments in software.”
The company believes that its way forward will be by combining its hardware activities with software, he added.
There is no limit to the budget or number of start-ups the company can invest in, said Miller, and investments will be made according to opportunity. Typically investments range from Seed to Series B, at an average of $1 million. Samsung will then either acquire the successful companies and incorporate them into its product lines, or help them raise funds to grow further, he noted.
Under a special Entrepreneur in Residence (EIR) program, Samsung NEXT Tel Aviv will also make investments in experienced entrepreneurs for up to 24 months. The program is designed to help entrepreneurs with ideas, and rapidly develop, test, launch and scale new products using Samsung’s global resources. The goal is for them to achieve funding or an acquisition offer by the end of the program, Miller said, adding Samsung NEXT is already working with a number of Israeli entrepreneurs and will announce its first start-up investment shortly.
“We want to help Israeli software companies grow by leveraging Samsung’s unique expertise and scale,” said Miller, who formerly worked for Google and set up Google’s Tel Aviv campus. “While our focus is working with entrepreneurs and start-ups who are primarily developing software technology, we will also provide a community and resources for entrepreneurs of all kinds.”
Samsung’s Tel Aviv office, which will provide companies it invests in with the ability to use its offices as a base, will increase the number of workers it employs to up to seven from a team of three people today, Miller said.
Samsung NEXT, which operates within GIC, would be the fourth Samsung program set up in Israel over the past 10 years. Other activities in the country include investments by Samsung’s venture arm, the Runway program in Yakum which integrates Israeli technology into Samsung business units, and Samsung’s Ramat Gan offices which invest in early-stage technologies.