US investor Sender Cohen seeks to raise $800m for Israeli science and innovation lab
Founder of new Nevo hub, who managed portfolios for George Soros and Stanley Druckenmiller, says Israel needs a top-tier research lab to reverse brain drain and attract top talent
Sharon Wrobel is a tech reporter for The Times of Israel.
Over the past two years, Israel’s tech ecosystem has grappled with two crises — political uncertainty around a proposed judicial overhaul and a 15-month multifront war — that have compounded a funding squeeze in the sector. But nothing has investors and entrepreneurs more worried than the shortage of human capital, engineers, and top talent to drive the development of future technologies in the nation’s growth engine.
US investor Sender Cohen, who has managed multibillion dollar portfolios for the Schusterman family, George Soros, and legendary investor Stanley Druckenmiller, is leading a venture to address the shortage. Investors led by Cohen are seeking to raise about $800 million to set up a commercial science and innovation research lab in Israel to help reverse the country’s brain drain, attract top talent to Israel help the country keep apace with next-generation technologies.
The Israel-based commercial hub, Nevo Labs, will focus on researching, developing, and investing in deep technology verticals in key areas of synthetic biology, quantum computing, and artificial intelligence.
“Israel is in danger of not being at the head of these areas, but Israel could easily be a leader in these areas today,” said Cohen, managing partner of KH2 Capital and the chairman of the prestigious Fulbright Israel scholar program. “War has catastrophic, unfortunate consequences, but wars also lead to great economic booms that can be great for the country. But we need to make sure the country is well-positioned for that economic boom in the right sectors.”
For the research venture, Cohen teamed up with Michael Eisenberg, co-founder of Tel Aviv-based venture capital firm Aleph; Adam Fisher, a partner at Bessemer Venture Partners’ Tel Aviv office; and Scott Tobin, a general partner at Battery Ventures, who are helping to establish and find investors for the commercial tech development lab.
Speaking on Eisenberg’s “Invested” podcast, Cohen likened the establishment of the commercial research lab to the need for Israel to have its own AT&T Bell Labs, which is often referred to as “America’s idea factory” and has a long and storied history of innovation and invention.
Based in New York, Cohen is a former chief investment officer of the Schusterman family. Before that, he was the director of research and head of external allocations at Soros Fund Management and managing director at Druckenmiller’s Duquesne Capital Management.
“Israel is very good at what’s needed for the next one or two years that is in the near term such as developing cyber solutions because of the military,” said Cohen. “Israel has not been great about what is needed five to 15 years out, that middle stage.”
Cohen attributed the lack of opportunity, infrastructure, and resources to develop breakthrough technologies in Israel as the main reasons that drive technology researchers, scientists, and academics to seek their fortunes abroad.
“Nine out of every ten doctoral students do their postdoc in the US, because that’s where the opportunity is and that’s where a great scientist is that can mentor,” said Cohen. “Once you finish your postdoc, you live in Boston and then you are offered to go to some commercial lab or some corporate in Boston.”
“In Israel, that opportunity simply doesn’t exist today so even if you want to come back, it’s hard to come back and that’s exactly what we are trying to address,” he remarked.
Over the past couple of years, industry leaders and economists have warned that Israel is in grave danger due to the departure of its best and brightest.
“Nevo Labs is trying to solve the problem of scientists not being able to come here if they are American because the opportunity doesn’t exist to do what they can do in the US, or [Israelis] leaving and not being able to come back because the opportunity doesn’t exist for them to come back post their postdoc,” said Cohen.
Israel is already falling behind the US and Europe when it comes to pulling in investments in startups that develop AI-based technologies and is poised to face a shortage in human capital in the field, a recent research report by the RISE Israel institute and Google Israel warned.
According to the report, Israel still ranks among the top 10 ecosystems for AI, but it is far from unlocking the full potential of the revolutionary technology as competition in the global AI race intensifies. Israel could miss the global AI wave and needs to implement a long-term strategy to allocate a significant amount of money and resources to boost education and academic research, encourage startups, and provide the infrastructure and cheap computational power needed to run AI models.
“Once we have the lab center set up we could be at the forefront of starting the next big wave in Israel, like Israel did in cyber,” said Cohen. “Longer term, I think we can create these centers of excellence in Israel where [scientists and engineers] can really be leading the charge and be at the forefront of technology developments.”
