Ten Israeli clean technology companies pitched a receptive group of California venture capitalists at a recent forum sponsored by the California Israel Chamber of Commerce.
The second CICC Israel Cleantech Summit drew more than 200 investors, researchers, entrepreneurs, corporations and community members to the Palo Alto Research Center on April 27 for a day of information-sharing and relationship-building. Attendees heard from cleantech thought leaders and the Israeli cleantech firms about innovative renewable energy and water technologies.
“The partnership between California and Israel is natural,” said Eric Weiss, chair of the CICC Cleantech Initiative and senior vice president of Worldwide Marketing at GreenRoad, an Israeli startup pioneering fuel-efficient driving technology.
“In California, you have a top 10 economy, a very active [cleantech] industry and a very progressive regulatory regime. In Israel, over 400 cleantech companies [are] investing and innovating in a vast range of areas: water, solar, smart-grid, agro-tech, fuel cells [and energy] storage.”
The CICC Cleantech Initiative “works to accelerate partnerships and investments between these two communities,” said Shuly Galili, CICC executive director.
Cleantech is a term used to describe products, services, processes or materials that provide superior performance, productivity or efficiency at lower costs while reducing or eliminating energy consumption, waste or pollution.
A who’s who of Silicon Valley cleantech venture capitalists turned out for the Israel Cleantech Summit, including investors from Greylock Partners, which has offices in Israel, and Musea Ventures, run by Sass Somekh, who grew up in Israel.
Vinod Khosla, the co-founder and former CEO of Sun Microsystems whose most recent Khosla Ventures fund raised more than $1 billion to invest in cleantech, gave an afternoon address. “The ratio of graduate degrees to the population is awesome in Israel,” said Khosla. “Israel has a really entrepreneurial culture. It is amazing how much progress Israeli companies make on a little bit of funding.”
Steve Westly, the former California state controller who now runs a cleantech venture capital firm, the Westly Group, spoke in the morning. Westly described how he had encouraged CalPERS to invest tens of millions of dollars in Israel and explained why he is now bullish on Israeli cleantech.
“Seven years ago, I was on the board of CalPERS and we were not investing [enough] in Israel, and I said ‘this must change.’ We began investing in Israeli bonds and Israeli venture firms,” said Westly. “Cleantech is a global revolution [and] Israel could not be better positioned, leading the world in solar, desalinization, electric vehicles [and] drip irrigation.”
“Israel is absolutely unique in that it has almost perfectly implemented the Silicon Valley model,” said Jacques Benkoski, venture partner at U.S. Venture Partners. “In Israel, between Haifa and Tel Aviv-Jerusalem, you have the same distance that you have between Berkeley and San Jose and you have the same concentration of top-notch universities, with Berkeley and Stanford here and Technion, Hebrew University and the Weizmann Institute in Israel. The extreme density of talent allows [Israel] to have a good infrastructure to develop startups.”
Rachel Sheinbein, a water expert at CMEA Capital, said Israel recycles 75 percent of its water, and the next closest country is Spain at 15 percent.
“[Israelis] have no natural resources. They don’t have any oil,” Sheinbein said. “Really, I joke that all they have is their brains, and they are using that resource to be successful. They have to be creative with water and they have a very entrepreneurial culture.”
Established in 2008, the CICC Cleantech Initiative held its first summit at Stanford in November 2008. In May of 2009, the CICC took 40 cleantech investors on an educational mission to Israel, introducing California’s venture capitalists to Israel’s cleantech leaders, entrepreneurs, research institutions and government officials.
“People on the trip were blown away by how vibrant Israel is, the number of [cleantech] companies and the caliber of the individuals,” said mission participant Erez Levy, managing director of TriplePoint Capital.
“Israel’s best and brightest are focused on cleantech. We see approximately two to four new deal opportunities per week,” said Glen Schwaber, a partner at Tel Aviv–based Israel Cleantech Ventures, a mission sponsor. “The Cleantech 100 was an award given to the best cleantech companies around the world. Of the 100 companies chosen, eight were Israeli or had Israeli roots.”
At the recent summit, 10 Israeli firms sought capital and strategic partners. For example, Linum Systems aimed to raise $6 million to research and develop, commercialize and sell a hybrid solar air conditioner.
“I have seen literally hundreds and hundreds of solar presentations, and I had yet to see one that is directly related to an air conditioner,” said Jason Matlof, a partner at Battery Ventures.
TaKaDu gave a presentation at the summit about water leakage. According to the World Bank, 25 to 30 percent of the world’s water is simply lost, primarily though leakage. Using data from municipalities, TaKaDu develops complex mathematical algorithms to detect water leaks, faulty meters and unexpected changes in consumption or pressure. This information helps municipalities take action to prevent water loss.
“Great team, very experienced, huge market opportunity [and] the right business model,” said Sagi Rubin, ticking off the many reasons he likes TaKaDu. Born in Israel, Rubin now works in San Francisco, evaluating cleantech investments for Virgin Green Fund.
“The [CICC Israel Cleantech Summit] brings entrepreneurs and companies together with venture capitalists — I saw them here in force from Silicon Valley — to really open people’s eyes in terms of what Israel has to offer in terms of clean technology,” said Adam Bergman, senior vice president for Cleantech Investment Banking at Jeffries. “This opportunity gives people the chance to say, ‘Wow, look at what’s being developed.’ ”
Yoni Cohen is a JD-MBA student at the Yale Law School and the Wharton School of the University of Pennsylvania. A former reporter for Fox Sports, he was born in Israel.