 Good morning First of all, I'm very excited to be here. It's my first time in Adelaide and Yesterday evening. I had the pleasure to taste some of your wine. So hopefully today. I'll be okay in the presentation But I really felt the warmth of the of the South Australia people, which I really like and I want to see also if you guys have been to Israel before I start talking a lot about the country So maybe can I have just a raise of hands whoever has been in Israel? Okay, we need to work on that, but it's a good start. Thank you okay, so What I'll do is I'll start with a presentation about the Israeli start-up mission and how we got to where we where we are now and I'll also try and see a little bit how it works in a specific model Which is the incubator model which we run which we as terror run it and also at the end I'll try to give a little bit of a Agro focus we are in an agro Conference and maybe give some tips about you know what we learn from all this process. So I'll try to be brief But please bear with me. So I'll start a little bit with the numbers. I mean, you know, many of you don't know Israel By the way, Israel is about 9 million people. I Understand is about 2% of South Australia in terms of In terms of space so quite dense and in this density, we have a lot of itic happening So you can see here some of the numbers We have about 350 multinational that have set up shop as R&D shop in Israel We have about 8,000 startups. So you can do the math is about one per a thousand population More than 100 vcs. I think that the latest numbers I have is 200 vcs, which of course, it's a great help for the ecosystem and About 8 billion dollar is invested every year in startup in Israel The good thing is the number grows every year So in the last five years, we had about 30% growth rate in this number Which is great for the economy and the most important for us VCs for us investors Is that we have also about 11 billion dollar of exit? So the model works you have about 8 billion dollar coming in even I mean last year was 6 billion dollar and about almost double it Actually goes back to as a return to investors and founders, which is a very important thing to continue the loop We're one of the highest number of companies on the NASDAQ after China are very good at patents and of course we have a very sophisticated and talented workforce with number one In the world in terms of engineers and scientists per capita So that's a little bit about the Israeli startup nation And here you see some of the companies that have taken shop in Israel How does it work in terms of the impact on the economy? Well, it's actually not that many people It's only about 8% of the population working there. We're trying to increase this number is a key Issue for the government really to try and expand this number to as many people as possible It's about 12% of business GDP, but most importantly is about 43% of experts Which means that most of the value add that is produced in Israel is actually in the high tech world And of course being such a small country experts are really critical for the growth and the well-being of the nation If you look at it on a on a global base, of course, Israel is number one in terms of VC dollars per capita So you see on the left. This is actually a European Focus, but you can see the the US as well is there. So we're about I would say two three times Higher than the US, which is the second in terms of dollar per capita on the right side You actually see it in absolute value and I made also a piece for Australia Sorry, my my graphics are not great, but I added it there. So my calculation was that you were about You had about $80 per person For 25 million people. So as you can see Israelis, it has a pretty much similar size of Germany UK and France, which of course are about six seven times as big. So there's a very nice Ecosystem One of the other thing that you might not know is that Israeli technologies are really being used on an everyday life Almost by everybody. Yeah, you have some examples. I won't go into all of them Might be familiar. We of course would have antivirus the firewall that you have in the computer These were started in Israel the automotive mobili, which is the system to To find if there is a car around you a little system Voice over IP was invented in Israel. So all the Skype and chat and Started actually by an Israeli company vocal tech about 30 years ago and the chatting was started by Mirabilis, which is a company in the 90s that was then sold to AOL And the discount key, of course, we have a lot of medical technologies. It's, you know, the slide is too short to make it to make it To see all the companies and that a thing which is very important Especially important for you is the what we call the clinic angle or the agriculture Angle most of you know drip irrigation, which of course is a technology started in Israel about 60 years ago And it's still now about 80 90 percent of market share is still with Israeli companies Salination where one of the country with the highest the salination In the world we now have about 50 percent of our water needs done by the salination And by the way, it basically solved the the water problem of Israel. I mean now is just a matter of cost I mean we could actually use all the water from the salination if we just we just have to pay for the water and for the energy and and of course the money to bring it The other thing we do waste water treatment I understand you also do a lot of waste water here in Israel We have about 85 percent of our wastewater is recycled into agriculture Which of course is a big issue for Israel and for you guys as well So that's a good point to start and solo terminal. It was also invented in Israel and it's quite well-known now So the PV has taken over but it's a was an interesting start One of the things that is really very important For the Israeli ecosystem is that it has attracted in the years a big number of multinationals So you see here from the 60s where Motorola IBM Intel came came to us and in the last 20 years You see really the exponential growth We have about 350 almost 400 now Multinationals that came to to do their R&D in Israel most of them started by buying a startup So it's really a full system with the startup system and as you can see on the right side You know most of the first companies were us companies because of the great relationship. We've had the US But in the last few years we really have a lot of Asian companies as well coming to Israel And that's a really big trend which is really growing in the next In the last few years and hopefully going to continue in the next time the next few years So I started to and all people ask me how come why Israel such a small country You know such a so many problems actually managed to do it And then the first question the first answer I give is that it's a little bit about the culture I mean Israel has been in some some tough situations and this has really created an interesting Combination of factors that made it a very good place to do a startup nation. So first of all, it's a very informal place I mean the ones you've been there. No, we call our Prime Minister BB They are former of Minister of Defense boogie. So all the sneak names. So this is really and this is really not just in politics It's really all around it's very very informal place and this helps a lot to bring up innovation We have great international network great experience meaning that a lot of the Israelis go out Globally and they return to bring their own expertise back to the country. That's a critical factor of success We have risk-taking is endemic. Unfortunately, we have some risks around the Nation and so we are quite prepared to take risk also in business There's still a pioneering at us. I mean we've been there for 70 years But still a lot of the new immigrants that come have still this will to change the world and do some things And so we have still this this idea, you know used to be that they were going oranges The pioneers or the immigrants when they came and now they are going into high-tech It's a small country. So everyone we just make two phone calls and you get pretty much everyone including the Prime Minister and and others a little bit more culture, so As you've been if you've been there, you know Authority is not really an important thing in Israel. It's a very very flat Everybody speaks his mind and this is a great great way to Bring new ideas into the into the place So an open an open place where everybody can say from the small worker to the CEO Pretty much at the same level. It's a great way to bring new innovation in most startups The big ideas come from the team and not from the top management. Sorry Marcus The other thing which is very important That's why I put it in black is you always get a second chance that I think it's you know If it's one thing that I really try to push the other countries to to try and get into their minds It's really the way to give you know people have to be able to fail If we'll be able to come back from the failure learn and then go to the next Opportunity that's a critical critical point for the success of of any company and definitely for a startup and And you know for us, it's much more important to have an entrepreneur that has done it a few times Even if it failed the first time then a person that is just the first time that is doing it Because of course you have to learn from your mistakes and hopefully you don't make them again in the next startup The other thing is because of the there's so many now entrepreneurs It has become really like a national sport. So I would say like your rugby, you know people are really Excited to be an entrepreneur. There's a lot of you know, the moms are happy that the kids be an entrepreneur And that's very important to continue the So beyond the the culture That I think which is you know, it's it's not just one factor. There are many factors that create a full ecosystem What I mentioned before the number of a scientist and engineer to have a really good Talented and educated population is critical. We had in the 90s about a million Russian immigrants Formal Soviet Union immigrants that came to Israel. That was a big boost to the economy But in general to have a strong talented Educated young people is critical to to running a start a startup nation. We have a really good universities With a lot of links we discussed actually with many of you yesterday now how to bring the link between Very good ideas coming from academia into becoming a high-tech company startup It's not easy. Also. We took a long time to develop this process But I think you have a good very good chance to do it if you make it well As I mentioned multinational is a very important the multinational role is double So first of all, it creates a full ecosystem in Israel. So whenever we need to partner with another company We don't need to be go very far. We have the company here We don't have to travel to the US all the time and the second thing is for training for our Young students so once a young student finishes college. He usually goes to the multinational. He learns how the How the business is done and then he starts his own company. It's important Of course that then they leave the multinational to start a company, but it is a very entrepreneurial There's a full financial ecosystem. So pretty much at any stage of a startup you have money available From the beginning you have angels accelerators incubators venture funds and a lot of grants from the government That's really critical because then at the at each stage entrepreneur can grow And of course, we have also banker lawyers accountant So anybody that is in the field can really have the help the expertise on the specific needs they have there is a unique role of the army, of course the army is a key part of Israel society and Beyond the fact that a lot of the top Entrepreneurs come from the elite units in the army. There's a lot of technology also that Started in the army and then got into the civil war. So that's a critical Component and of course the government has been extremely helpful. I like to touch a little bit more on this topic I think here we have a Few people that might be interested so let's see how the government helped in In Israel to push the ecosystem The first program was Yosemah, which was basically the seeding of VC funds in 94 So they were able to just by putting about a hundred million dollar into the economy Which by the way, they all recouped so the government invested and then return all the money They managed to set up 10 VC funds for with external help and that really created the whole VC Venture capital ecosystem in Israel, which is very critical We have the incubator program will tell we'll talk about it a little bit later We have grants pretty much a tennis stage so an entrepreneur that comes It can be from from a university. You can be alone any time of the of the Of his life. He'll have a potential to apply for a grant from the government and that's very critical There's also grants R&D grants for traditional companies that want to innovate Which is also very important to try and push this technology not just in the high-tech world But also in the low-tech world And one of the thing which is very important is the bilateral so we have we've quite a few Countries in the world and states in Australia. I don't know if we have it with South Australia if we do Okay, so bilateral grants were basically a company here and the company in Israel can do a joint project and get about 50% matching of the of the money The other thing which is very important And I think it could be useful for one of the issues we discussed here is the pilot matching program Which is basically in specific sector the government will give you 50% of the Investment in doing a new beta site a new pilot and I think for agriculture This could be very very interesting because it reduces significantly the the the cost for the Buyer and of course it brings a big incentive for the two to work together even if technology is not yet ripe The other thing we have of course is no taxation for for an investor in Israeli startups and we see which is very very important Maybe I'm not sure you see this this properly, but it just to show you that it takes time I mean we started all this process in 69 in 84 we had the R&D low and 91 was the start of the incubator 93 was Yosemite So there is really a process that has taken about 30 years So it's not it doesn't happen overnight, but it's a really good way to to see how The government can help and also can change the process in time So every every five ten years they actually change a program to become more suitable to the to the space And these are some of the criteria for a good management intervention the the top management of this innovation authority, which is the one leading the The help of the government comes actually from the industry They don't come from the government and our politician the industry people that came into the government That's very critical because they really understand how the industry works The matching that the government does goes down with risk So at the beginning they can go to even hundred percent of the matching up to 30 percent down to 30 percent of the matching as soon as the risk goes down. It's as I mentioned it encourages partnership between International groups it lets the private sector choose the winners It's not the government decides who the best companies are they select groups that then select the winners in the industry There's a very very focus on innovation They don't want to crowd at the market So they look at what is the gap they have to bridge and they focus on bridging the specific gap Where the risk is higher? They don't want to just invest money when there's no when there is no risk And the other thing which is very important is they they leave the upside to investors They understand that for investors to come into things like that They have to keep the upside to the investor not touch it and they give some time downside protection For the investor so that's a really great way on how to incentivize investors to come in and keep them there the upside So this is a little bit about the government I won't go into details here. Just to show you that it's pretty complicated process they have money for a lot of different Groups they invest about 400 million dollars every year in the In in the Israeli economy by the way, that's not such a huge number for a population of 9 million people But it's very very significant and it brings a lot of outcome out of it So you see here some of the technology so it's very very Very variegated for each sector they have a different program And it's really a matter of evolving so it evolves every time they see a need They bring up a new program which I think is very important so I want to to take our example to give you a little bit of of a Taste of how it works and how it can help the economy. So we are a venture fund early-stage venture fund We have for this unique approach Which is a six to one matching that we get from the government 85% and we have 25 companies in our portfolio mostly in digitalization Clean energy healthcare IoT and big data And About seven years ago. We were selected by the Israeli innovation authority by the government to run one of our incubators It's a very very competitive process. You can see at the bottom there Some of the other companies that want the process so you can see we have Phyllis boss of scientific IBM Metronic nil centave that is a huge Conglomerates that decided to come to Israel to make investment and they were very very attracted by this great matching mechanism that government put up How does it work? So it's it's quite simple. I mean basically the government takes out all the risk in the early stage We put up only a hundred thousand dollar plus some of the expenses of the incubator The government matches that with 600 K for every company every investment We do and the beauty of the system is that we get all the upside so we get Usually 20 to 25 percent of the company just for the hundred K because of course the company sees the whole 700 So it's like a typical city investment And and then the government will only get repaid through a three percent royalties out of sales So only if and when the company is successful and start selling the product They'll start giving back three percent of the sales to the government So it's a great way really to reduce significantly our risk at the beginning and get paid only If and when the company successful So it's a really partnership between the private and the public sector We're actually in this case the public sector takes most of the risk of the initial stage investment Which is very brave, but it's a model that works very well What does it do to our model? So we see this is Israel. We see about six seven hundred deals Per year from only from Israel in our fields What we do is we do the first selection we select about four or five companies after the six seven hundred So less than one percent of the companies that come to us were selected to go into the incubator and Again at this stage we put very little money. We put just a hundred K plus some expenses That's where the government bring us the big funding and then we work with them for 18 months So it's a real incubator. It's a place where our team sits with We've all the all the companies and we really help them bring the product to development to the bit to the market So it's a really very intense program But by doing that we also really know the company very well Usually when you do any seed investment, you know, you maybe you come to the board It's not a very intense process and you don't get a lot of I would say quality time with entrepreneurs In our case we actually leave with them 18 months with the good days the bad days of the entrepreneurs So you really get to know the people you're investing in and then the second stage is much easier Because then you really know if the company is good or bad and that's where we put most of the money so basically the idea is you know we The government helps us in investing in many companies in early stage. Thanks to them We were putting much more money in the initial much more Sorry, we invested many more companies at the initial stage and we help them a lot so the success rate of The first companies is much higher because we bring a lot of value into the process and also in terms of our investors You know the money that is invested in the companies most of the money is actually invested only after We see them for 18 months So it's a really good way to get to know the entrepreneurs and understand where to invest Most of the money that we put in by the way the government continues with the matching But as I mentioned before the matching goes down. So in the second stage, it's one-to-one matching First stage is 6 to 1 the second one is 50-50 because of course the risk has gone down And so there's less need for the government to intervene So that's how the model works by the way just to give you an idea in terms of what is the impact on the economy of this program? So in the last four years, we got about 12 million dollars from the government in the early stage So we we invested in 20 companies Those 20 companies in the last four years have raised more than hundred million dollars So the company invested 12 million dollars and our companies raised hundred million dollars Which of course all went into the economy So just in the last four and by the way these companies are still growing so they'll raise much more money So just in terms of the of the multiple They had a multiple eight to ten times of the money that was invested by the government So it's a really good investment because of course most of this money goes back to the government through taxes and payroll Exige you can see here that basically because of the system we get really nice Upsic for our value So this investor view in the second stage you see we continue to invest in the company So the gray goes up But the value that was created for our part was big So you see all the blue is basically the valuation of our stake in all the companies goes up a lot Which brought us to have a net IRR or more than 30% for investors, which is of course pretty good achievement a Little bit about the sectors we invest in so I think that some of them are very very suitable here What we do is really we try to Use some of the best technologies that we have in Israel IOT big data AI robotics and to use them in a little bit more conservative industries So we take in them sometimes from other sectors and Apply them in all the sectors you see here, you know, agritek transportation Construction retail, etc. And the idea is really that we believe all these sectors and this is a great example in this conference All the sectors are really ripe for innovation. It's if you make it well You can these are huge markets So if you can make it well, you can really become a very big company by focusing on them But it's still early stage So we the valuations are not very high because most of the investors are not yet focused on these Companies but we believe that by taking them at the right moment We're a bit at the inflection point and that's really where the value will come up And I have to say we see it in our company fielding for example that you know Investing at the right time the company now is growing much faster than most of the other companies which are much more IT based So if you if you have the right product into the market then you can really sell it very quickly even in a conservative industry like agriculture and This is the rest of the portfolio So as you can see we invested in digitalization what I mentioned before we have quite a lot of energy and Clintek companies in our portfolio and also a few healthcare Companies so that's a quite a diversified portfolio And it's very important to have a diversified portfolio because at any given time, you know One of the markets can be in distress. So it's good to have a good diversification also on the portfolio level So I actually after yesterday night Chat we had with some of some of you guys I put up some some sorts of things that could be done here in South Australia or could be learned from the Israeli model Etc. And and I think as you might have understood by now It's it's not about one thing. I mean there has to be quite a few factors to make Full ecosystem work. I think government can really play a big role into it But it has to be a role not just money. I mean it has to be more of a role of education You know to you probably won't get the same culture as we have in Israel This comes from many many different factors, but it's very important to try and and put even in the school level An idea of entrepreneurship of bringing new ideas, etc So it's really comes from the very early stage in Israel We have a lot of programs for young kids from the age of 12 to 16 to make their own idea Make their own startup. So I think it's something that can be also used here to increase the the level of entrepreneurship And so that's one side and of course What I mentioned before give the people a chance to to fail I don't know how you do it on a government level, but that's very important You know to to let the people really try as many time as possible and give them then a second chance That's critical for a startup ecosystem to be built and of course money I mean I described in what Israel is doing for the Israeli government is doing for the ecosystem It's not a lot of money by the way as I mentioned is four hundred million dollars out of the budget Which is I think a hundred billion dollar So it's maybe you know four percent of the budget or something like that No less than that. Sorry. It's half a percent of the budget So not much money and of course the return as I mentioned can be ten times the money Invested into the economy. So it's very very important to do it Of course and do it properly and one of the things to do it properly is really to learn from the experience of others There are many many different countries that tried all kinds of different models So it's great to see to learn from what all the others have done and of course apply it in the in the best way For selling Australia the other thing which is important and was critical for the For the Israeli model was attracting international experience, you know attracting the multinational companies Attracting experts and also bringing back your expert I understand a lot of Australians go out to the US or other places and not all of them come back That's a really critical way to bring back The best talent and because they bring all the expertise from the foreign country and they're bringing back to really enrich The way the country here is done. So again, we also Israel tries to do it It's not easy We also have a lot of people moving out to to the US but most of them then come back because of family because of Opportunities, etc. That's a critical point to really improve the way we do it Lastly, you know, it's a long process. It's not also in Israel. It hasn't come overnight You have to start somewhere to you know, hopefully in the next 10 years 15 years to become also Maybe a small startup nation, but we have to start in order to for the process to to be I just want to finish with a little bit of a few words about agriculture Hopefully some of you will will be interested So it is a little bit about the the ecosystem in Israel We have about 400 companies that are working in the ecosystem as you can see quite different Applications and between them also there's a lot of diversification on pretty much any topic touched by agriculture the money that goes into the field is about 200 million dollar So compared to the 80 billion dollars that I mentioned is not high So, you know if people are complaining here does not enough money in Israel also in agriculture does not that much money And really people have to struggle a bit to find the money because most of the money goes to you know AI automotive Cyber, etc. So it's a fight also in Israel That is a really nice ecosystem that is building up In our specific fund we have two companies that are in the field one is presenting here So I won't go too much into detail. It's filled in But I think an important part of building is that it was started by farmers. So we had Basically two one farmer that connected to his friend was an entrepreneur So they brought both a really good deep technology deep industry expertise with the entrepreneurship and the IT on the other side and the Combination of the two was really a big success because they could really produce a product which is really suitable for their Final customers create a great relationship with farmers and then improve the products all the time And now they're selling into the US most in California in Israel and from last year here in Australia So we're very happy to be here, and I think it's growing very nicely The other one we have it's much earlier stage. It's called a ruga. They actually built a robot for pollination pruning and monitoring of tomatoes in greenhouses Also this company by the way started in Israel But because you have here in Australia a big problem of importing animals including bees We decided to actually have a second market here in Australia So actually out of the two companies in agriculture we have both are working here Which I think it's a good sign because it means that the market here even where if we are quite far from you guys It's it's such an interesting market such nice and good people and good partners that we can bring a lot of people here to again With the expertise to really build the ecosystem also here And lastly I just want to share some of the lessons and I mentioned, you know We make a lot of mistakes. We try not to make new mistakes. Well, sorry We try to make new mistakes not all mistakes So we try to teach, you know, everybody what all the mistake we did so that you don't do it yourself So lesson learned from working in agriculture The first one as I mentioned is you really need to know the industry well You really need to know the farmer as well to talk to the farmers all the time because at the end of the day They are the the buyers of your product It's even more important than in other industry where you might imagine what the customer will know in this case It's very important to know what they really want and it's not obvious sometimes Bring a simple solution to a current product. There's a lot of companies doing, you know, amazing AI big data drones, but you know things that might have an impact on the farmer three years from now or maybe on some Some niche thing that it doesn't really care So it's very important to understand from the farmer. What is the specific pain? He has now and find a good and simple solution for this product and make it simple meaning extremely extremely Friendly user friendly with a really good user interface user experience. That's critical By the way, you know the guy that's building at the beginning they made a product Which was not really rocket science, but it was so well produced so well packaged for the farming industry that it was selling it like You know extremely fast The other thing which is important is you have to create value for all stakeholders You know, sometimes when you sell a product you focus on one of the I don't know the farmer or the worker or the Agronomist is very important to understand what each of these stakeholders Can bring can get value out of it talk to them to understand how to make the product as good as possible For all of them and not just for the for the key buyer And the other thing we learned is that you want to get to if you have many crops that you're working on It's best to focus on the crop with the highest relative value for the customer You know, you might have crops that are much much bigger, but you might be only I don't know half a percent Impacting half a percent of their cost structure Not interesting enough if you can actually impact 30% of its cost structure or increase significantly yield even if it's a smaller market It's much better to start with that because then it's much easier to penetrate the market And then you probably can go and and conquer also the other crops But it's very important to find the crop that has the much the highest value for specific product You're building as I mentioned build the product with the customers You know sometimes it's a bit tricky because you talk to a lot of customers and they want everything, you know 25 different features so at the end of course you have to focus select the features that you want to develop in your product and Build those and then, you know, maybe the others build with time But you have to really talk to all the customers to understand what it's really needed in the product And by the way sometimes what you think is the killer app is definitely not a killer app And they will tell you what is the killer app because they you know, you're thinking and I think it's different They leave the the farm every day So it's very important to understand and sometimes it's really simple thing Which you haven't thought about but by talking to customers you understand that that's a really good thing And they'll buy the product for that. I mean all the other things are good, but they'll buy it just for this specific Application another thing which we found very important is to create key references Really invest in your customer build a strong relationship with them. That will be the best reference for for the other Customers, but it has to be per geography. It's very difficult to get, you know A farmer from the US talking to an Israeli farmer Forget it in each country in each geography You have to build a really good one or two customers that will talk to the other customers Build your brand and they will be your best marketing guys I mean once you've done that you're you're in good shape the other thing is once you get into a custom Which you know, it's a very difficult process to really win a customer But once you are in you meaning that you sold to him and you create this relationship You haven't you have to not to stop the relationship invest a lot in the relationship Because again, they are great reference But you can also upsell and cross out to them and build the new products That you want to build together with them once you're in it's much easier to sell them new products to build with them The right new products, so it's very very important to invest in the customers also after they signed with you So that's the thing so I think I'm done I hope it was interesting enough for you, and I'll be happy to answer any question if you have thank you very much