Spanish telecommunications giant Telefonica is currently scouting Israeli startups for disruptive technologies in a range of areas such as digital health, education, smart homes, and mobility, through its innovation division, Wayra X.
These sectors may appear beyond the interests of a major telecommunications company — one of the largest in Europe and among the top 10 worldwide with about 350 million customers — but Luisa Rubio, head of Wayra X, told The Times of Israel in a videoconference interview from Madrid that the division was set up with a mission to “look outside the footprints of Telefonica” and discover innovation across fields and countries.
Israel’s tech ecosystem, she said, was one of the first Wayra X looked to because of its “strong entrepreneurship” and the application of “real tech to real problems.”
The investment hub, established in late 2020 to back early-stage digital-first startups as part of Telefonica’s wider innovation division Wayra, made its first investment in an Israeli startup in its first year of operations. Wayra X took part in a $2 million pre-seed investment into Upword, a Tel Aviv outfit that developed an AI-powered summarization and reading productivity tool. The investment was one of roughly two handfuls of startups Wayra X has backed in under two years.
Whereas Wayra operated as an accelerator program — working with over 800 startups in 30 countries that have generated revenue of some $300 million since 2011 when the innovation arm was established — Wayra X was set up to move Telefonica into B2C (business-to-consumer) “mass markets” in areas such as ”5G, e-health, e-learning, smart home, entertainment, mobility, and the future of work.”
Through its seven hubs in 10 countries including Brazil, Germany, the UK, Mexico, and Spain, Wayra X looks to back entrepreneurs and companies hoping to resolve complex challenges “and improve people’s lives by incorporating cutting-edge technology into their daily routines.”
Rubio said that in B2C markets, “the innovation and technology is not always obvious; there are a lot of marketplaces with interfaces, for example, but no real technology.”
Wayra X wants to “deliver real impact for end customers,” she said.
With Upword, said Rubio, “it’s true that it’s a different area for investment, but education is an entire focus for Telefonica and a key area for us when scouting.”
Formerly known as Erudite, Upword was founded in 2020 as a platform that leverages artificial intelligence to create short abstracts or summaries of long texts to boost reading and productivity. The platform is currently in private beta stage, but potential users can sign up for the waiting list and access the company’s free extension on Google’s Chrome browser in the meantime.
Upword says its tool can reduce long texts by up to 80%, but also offers so much more.
Upword co-founder and CEO Roee Barak told The Times of Israel that while the company is “building the best summarization tool in the world” as a first product, its wider vision is “to build the next-generation of personal knowledge technologies.”
To do this, the company is harnessing “cutting-edge tech in the fields of NLP [natural language processing] and machine learning to help people capture, learn, read, consume, and manage their knowledge throughout their daily routine,” Barak said, adding that this serves to optimize “what we can do with our personal knowledge.”
The main problem Upword is tackling is that of “information overflow, the [different] formats of content today, and the new-generation habits of consuming content and knowledge,” he explained. These are all issues for knowledge workers like students, lawyers, doctors, analysts, journalists, marketing professionals and so on, he said. “This is our market.”
Barak also emphasized Upword’s collaborative elements between AI and humans, where the tool “saves a lot of time and effort, extracting key parts of the content and generating outlines” of texts and essays before the user steps in.
Users can “add their own notes and rephrase or paraphrase what the AI has extracted, and eventually, it becomes a new derivative creation. So it’s a collaboration between AI-powered notes and summaries and the user’s own work to create a new summary or essay that can be published and shared, and worked on collaboratively with other people,” he said.
The work is then indexed and saved in the user’s library on the platform for future access and use. The idea, Barak added, is to positively impact “people’s productivity with their own knowledge, helping them save massive amounts of time on acquiring the knowledge and then using it when they need it.”
Rubio said Upword was so much more “than just an educational tool for students, it’s for everyone. We loved that it has added value and it’s a tool for everyday use.”
Telefonica’s customers “expect surprises and new solutions they haven’t thought of,” she explained.
“We always keep in mind that we are a telecoms company, but we also want to provide value to customers in areas such as gaming, entertainment, health, and education,” Rubio added.
Such solutions can be implemented for the sake of customers and/or used internally by Telefonica’s over 110,000 employees worldwide. Wayra X also helps the companies it backs do business directly with Telefonica, said Rubio.
The Wayra X head recently wrapped up a four-day trip to Israel, where she met with entrepreneurs and tech stakeholders in Tel Aviv and Jerusalem as the hub looks to deepen its connections across the country and stay plugged into new ventures.
Rubio said she works closely with Start-Up Nation Central, a nonprofit organization that connects global businesses, governments, and ecosystems to Israel, and partnered with the Azrieli College of Engineering in Jerusalem (JCE) for an innovation contest that will see Israeli students fly to Madrid next month for South Summit 2022, an innovation conference for entrepreneurs and investors.
These collaborations are aimed at identifying new ideas to look into and ventures to invest in.
“Currently, we are looking to detect new areas for new divisions, such as the metaverse,” said Rubio in reference to the world of interconnected virtual communities where people can meet, work, and play, using a range of devices like virtual reality headsets, augmented reality glasses, and smartphone apps. A number of Israeli companies are already operating in this space.
“Israel is one of the most competitive ecosystems in the world, it’s on the same level as the US… but smaller where the level of conversation and the quality of the startups are interesting,” said Rubio.
To access top-tier deals, she acknowledges that Wayra X and Telefonica will have to “act fast and not behave like a typical corporate player.”
“The speed of the ecosystem [in Israel] is crazy,” she said with a quick laugh, adding that she has heard of deals closing in as little as 72 hours.
“We’ll have to adapt our way of working,” said Rubio.
Wayra X is now looking to add two to three Israeli startups to its investment portfolio by the end of the year, she indicated.
Note: This article was updated to correct Upword’s pre-seed investment to $2 million, and not $1.6 million as initially stated, and its founding year to 2020. The updated version also includes an interview with Upword co-founder and CEO Roee Barak.