Globes: Israeli auto-tech startups proliferate
Updated: Aug 14, 2018
Israel has over 600 smart car and transport startups. "Globe" looks at some of the lesser known promising companies.
Ecomotion, the Israeli auto-tech community's annual event, is taking place today in Tel Aviv Port. The latest count shows that over 600 smart transportations companies are operating in Israel in 2018, compared with a mere 87 five years ago, an impressive growth rate by any standard. In a country that does not even have one auto assembly line and was a mere blip on the auto industry marketing radar up until a few years ago, it is no less than incredible.
What caused this explosion? The knowledge, personnel, and entrepreneurship were here already in 2013, and General Motors has had an advanced R&D center here since the previous decade. At the beginning of the current decade, however, the Israeli auto-tech industry was still under the shadow of Better Place, which burned almost $1 billion of investors' money and made Israel an untouchable for a large proportion of the auto industry. Something big was needed to get past this trauma, and something big indeed happened: the giant IPO by Mobileye, followed by the company's 415.3 billion sale to Intel.
The deal brought major venture capital investors from all over the world back to Israel, accompanied by the heavy guns of the auto industry, who were belatedly exposed to the advanced Israeli entrepreneurial environment and R&D resources familiar for many years to other technological sectors. The spigots were opened accordingly. In the past five years, financing rounds and acquisition deals by Israeli auto-tech companies have amounted to $5.2 billion - excluding the Mobileye deal. The amount raising in financing rounds is going up every year.
Over 20 major auto industry manufacturers and suppliers currently have offices in Israel looking for technologies and possible investments or acquisitions. Some of them have incubators or R&D activity here. The aggregate revenue of these companies is over $500 billion. Add to this the prodigious global venture capital hype about everything involving autonomous, alternative, smart, and environmentally friendly transportation, and you get an ideal format for growth.
This promise is not only producing young and enthusiastic entrepreneurs founding new companies in their parents' garage; it is also attracting experienced high-tech personnel, who are leaving their well upholstered offices in the IT industry for automotive adventures. Quite a few large and well-established companies, including in the defense field, are starting subsidiaries in order to combine their core technology with the auto sector's big money.
How long can it continue? No one knows, but as of now, more and more startups are appearing.
In this article, we are focusing on companies "below the radar" attending the Ecomotion exhibition. Some of them were founded in the past few months, other have been operating in stealth mode with no publicity. There are also companies doing most of their business overseas where their customers located but are being driven by interest from investors to reconnect with their Israeli roots. What they all have in common is advanced technologies that fire the imagination. Some of them will probably disappear in the future, as often happens, and there are probably many others that have yet to appear on our screens, but it is very likely that one or more future exits are concealed behind the companies on the list.
One of the factors sparking the auto-tech industry is startups developing technologies for segments such as security and aviation but discovering in time that their technologies are likely to prove very valuable in the auto sector. One of these companies is Holon-based Art Sys360; its miniature and 3D radar technology with no moving parts make it possible to scan the car's surroundings peripherally. This technology has many possible applications, such as real-time analysis of complicated transportation situations, detecting traffic violations, and warning pedestrians. The company has raised $3.9 million to date in two rounds, small change in comparison with the current investments in auto sensors.
Another startup with a radar-based miniature sensor is Ra'anana-based RFISee. The company says that its radar features low cost and very high resolution, the ability to generate a 3D map of objects around the car and display their acceleration, and the ability to operate under difficult vision conditions.
Imagry is trying to be Mobileye 2.0. The company is developing a machine vision solution for autonomous driving platforms based on cameras that cost significantly less than conventional radar, laser radar (LIDAR) and GPS-based solutions. The company, which was founded in 2015 by Haifa-based CEO Adham Ghazali and CTO Majed Al-Jubeh, currently has its headquarters in Columbus, Ohio. Imagry has raised $7.4 million to date, among other things from Samsung Ventures.
Vayavision, which is trying to integrate different solutions, is developing sensory technologies for autonomous and Internet-connected cars. The company says that its technology was designed to create a 3D model of the car's surroundings, while connecting raw information from cameras, radar, and LIDAR systems. Like Imagry and many other companies, Vayavision also uses machine learning and neuron networks for the purpose. The Or Yehuda-based company was founded in 2016 by Comsys cofounder CEO Ronny Cohen and CTO Dr. Youval Nehmadi, another high-tech veteran.
TriEye is keeping its cards even closer to its chest. The official information about the company, founded by CEO Avi Bakal and VP R&D Omer Kapach, says it is developing a "breakthrough vision solution for all weather and lighting conditions based on very low-cost short-wave infrared (SWIR) cameras." SWIR technology makes it possible to scan objects and spaces and distinguish concealed items invisible to the human eye under difficult weather conditions. It is currently used for industrial and security purposes, while use of certain of its formats is being monitored by international agencies for restricting weapons proliferation. TriEye is trying to have its technology adopted by the automotive industry.
Aerodynamic design of vehicles is a prolonged and expensive task involving testing in wind tunnels, simulation, and so forth. The problem is particularly acute with trucks pulling trailers, for which planning an efficient aerodynamic structure in advance is difficult. This is very important, because reducing wind resistance is directly reflected in lower fuel costs.
Actasys's solution, called "smart air," sounds a bit like science fiction. Models of conducting materials are used that electronically adjust wind movement above and create what is called a "virtual aerodynamic structure." These models, which are installed at key points along the car, are controlled by a central control system connected to the truck's management system that adjusts the flow of air above the truck and the trailer in real time.
The company website says that it is currently focusing on the huge US truck market from its base in New York and already has agreements with large transportation companies. The company has raised only a few hundred thousand dollars to date but has won a grant for development and production form the US Department of Energy.
Hailo made the headlines last year under tragic circumstances when its CEO, Israel Defense prize winner Colonel (res.) Rami Feig, drowned on the Habonim beach. The other company cofounders also worked in the defense establishment and intelligence. The company operates in stealth mode. One of its investors is Zohar Zisapel.
The little published about Hailo indicates that it is trying to take artificial intelligence in a smart car in a new direction. The Maniv Mobility fund, one of Hailo's investors, says that the company "has developed silicon specially adapted to a nerve system that abandons conventional computing in favor of a chip for deep learning tasks with uses in an autonomous car." It also sounds very mysterious to us, but according to our sources, many doors in the auto industry are open to this young company, with practical partnerships with tier-1 manufacturers and suppliers. We will therefore not be surprised if we hear a great deal more about Hailo in the foreseeable future, accompanied by some serious money.
Cyber for cars
Israel is a global center of cyber security expertise, with a great deal of trained personnel and a good reputation in the sector. Following the impressive exit of pioneering company Argus Cyber Security, we are seeing an entire armada of local auto cyber security companies. At least three intriguing companies in this sector yet to attract much attention will appear at Ecomotion.
C2A, a Jerusalem-based startup founded six months ago, has a solution designed for trucks and cars that combines software and hardware from the chip level upwards. C2A was cofounded by CEO Michael Dick, a former VP at Cisco Systems and former senior VP at NDS. The company made headlines two months ago when it announced that it was offering its unique technology to auto manufacturers and suppliers without payment of royalties.
Regulus focuses on protection of the complicated sensor system of smart and autonomous cars, which has become larger with time. One Regulus's products, Pyramid, is designed to protect GPS sensors from malware that can broadcast false data and disrupt a car's orientation in its surroundings. The 40-gram product detects and prevents attacks. The company raised $6.3 million in its seed round from Sierra Ventures, Canaan Partners, the Technion, and others.
Enigmatos performs deep analysis of communications protocols and engine control units in order to protect communications between the car and the cloud. The company's president is Major General (res.) Ami Shafran, a former IDF technology leader, and its founder and CEO is Eyal Kamir.
Future autonomous cars will need much more precise navigation systems able to detect blind spots than what the GPS systems in use can provide. This is a window of opportunity for niche companies specializing in development of systems and algorithms for improving the accuracy of satellite navigational systems. This is the background for the sale of young startup Exo for a price believed to be in the tens of millions of dollars.
Startup Deeyook has developed a cloud-based solution that uses base stations, WiFi, and LTE to provide location data accurate to 10 centimeters, including within buildings and with no need for infrastructure. We assume that such a solution can provide what an autonomous vehicle needs in order to move within closed infrastructure, such as underground parking lots, tunnels, etc. The company is receiving support from local accelerator Drive.
While the above companies operate in areas we are familiar with, other companies are working on developments we can only guess at. Powhere, for example, is developing a solution for the problem of a shortage of charging stations for electric cars, which is likely to delay the initial penetration of electric vehicles. The company's idea is to provide "energy on demand" up to the customer's doorstep and connect customers to companies providing mobile charging (or fueling) for parked vehicles. How? They are not yet revealing this. The company was founded last year by Dror Galron and CEO Amir Shapira and operates in the Shoham area.
Less is known about Fleetonomy, but its concept is interesting: remote management of autonomous vehicle fleets through the cloud - a step towards a not-too-distant but uncertain future in which coordinated fleets of driverless vehicles travel on the roads. The company's main target market, at least initially, is probably the leasing market, as can be learned from its appearance at the annual leasing vehicle conference in Las Vegas.
Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2018