Friday March 10, 2017 0 comments
FORT COLLINS -- Innosphere is working with the nation of Israel to create the Israel-Colorado Innovation Fund, a first-of-its-kind initiative aimed at transforming innovative Israeli startups into global leaders in the water, energy, transportation and IoT spaces.
The initiative has been in the works since last fall as Colorado and Israeli officials have combined their efforts to establish a direct connection between the state and Israel, known as “the startup nation” for its staggering number of new startups – 1,400 – every year.
But while Israel is a powerhouse for startup creation with generous national support, it has lacked the ability to access the lucrative U.S. market.
That’s the goal of the Israel-Colorado Innovation Fund, said Israeli Gili Elkin, managing director of Strategic Growth Syntech Bioenergy in Denver who is representing the Israeli government in the initiative.
“Our big vision is to connect between Israel and Colorado and create a very big impact,” Elkin said Thursday at Innosphere’s Innovation After Hours monthly education-and-networking event.
Elkin said Israel is second only to America’s Silicon Valley in the number of startups created and is No.1 in per capita startups.
Still, Israel has generally lacked the ability to launch those startups into the U.S. market, she said.
“The biggest obstacle for Israeli startups is to penetrate the U.S. market,” Elkin said. “We decided to fund the Israel-Colorado Innovation Fund to help access that market.”
Elkin said Israel will provide access to “the most innovative Israeli startups,” who will come to Colorado to receive the help needed to launch a U.S. operation.
Mike Freeman, Innosphere CEO, said the tech incubator – with five locations and considered Colorado’s top-performing startup facility over its 17-year existence – has the ability to grow a strong connection between Israel and the state.
“People ask me why we got involved,” he said. “Companies that will be invested in will establish a U.S. business.
“The rationale for participating on this is we know how to do this already. We don’t have to create anything new.”
Freeman said it will work with a large number of Colorado-based partners – including Colorado State University, CU-Boulder, School of Mines and the National Renewable Energy Laboratory (NREL) – to facilitate the growth and market penetration of the Israeli startups, who will be based in Innosphere facilities.
“The core question is how do you get access to this (American) market,” he said. “That’s the main focus here.
“We’ll be leveraging the partnerships we have. Fundamentally, what we bring to the table is market access.”
Next month, Freeman said, 15 Israeli energy-focused startups will travel to Colorado to begin the process of gaining a foothold in the American marketplace.
The Israel-Colorado Innovation Fund has an initial goal of raising $10 million to help startups get off the ground in America, with about $6 million already raised. Elkin said the government of Israel has pledged matching funds to help bolster the fund.
She said startup investments under the fund will range from $500,000 to $1 million, with “two to three” companies invested in each year.
Freeman said the arrangement currently is a “one-way” street for startups, with only Israeli companies benefitting from the initiative.
While that may later expand to Colorado startups getting direct access to Israeli markets, Freeman said Colorado will economically benefit from the jobs and taxes paid by Israeli companies who successfully launch operations in the state.
The initiative has won the endorsement of Colorado Gov. John Hickenlooper, who wrote a letter of support.
“This program is a first-of-its-kind, and we are very supportive of the leadership role you took upon yourselves in raising awareness of Colorado as a global leader in energy and water innovation,” Hickenlooper said.
ICI Fund portfolio companies will take part in Innosphere’s two-year incubation program, receiving the guidance, networking and financial assistance it provides to its clients.
“This is the first time in Israel for an entity to come and give access to U.S. markets for two years,” said Elkin.
“That’s what’s so appealing.”