Israeli startups in the spotlight

In contrast to invasive surgical procedures in which unwanted fat is physically extracted, Ultrashape’s transdermal application of ultrasonic energy causes the targeted rupture of fat cells.Amid the resurgence of interest in Israel by American and European venture capital companies, the …

In contrast to invasive surgical procedures in which unwanted fat is physically extracted, Ultrashape’s transdermal application of ultrasonic energy causes the targeted rupture of fat cells.Amid the resurgence of interest in Israel by American and European venture capital companies, the Israel Venture Association last week brought the focus back to the basics – the Israeli startup.

Founded in 1996 as the representative association for the Israeli Venture Capital Industry, the IVA ‘ s objectives are to promote and stimulate venture capital activities in Israel, providing information, networking opportunities, publications, and international contacts for the benefit of investors and entrepreneurs active in the Israeli market. IVA membership now exceeds 150 Israel-based or Israel-oriented VC’s, investment and holding companies, investment banks, service providers, CPA firms, and law firms.

One of the highlights at the IVA annual high-tech conference in Tel Aviv, was a Start-Up Show Competition in four categories: software and information technology (IT), communications, life science and homeland security. More than 40 companies that passed the final screening stage presented to Israeli and foreign investors during the conference.

And the winners were… Zoomix, Wisair, UltraShape and Aspectus.

Zoomix won the software and IT category, Wisair in the communications category, UltraShape in the life sciences category, and Aspectus won the homeland security category. According to the international jury, the winning companies demonstrated ingenuity in their products or services and potential to develop into successful leading companies in their field.

The prizes were awarded by IVA chairman Chemi Peres and Eurofund 2000 LP managing partner Moshe Price, who also chaired the jury. All the companies that competed in the Start-Up Show gave 10 minute presentations to local and foreign investors. The winning companies will each receive a one-page advert in Forbes Magazine and a strategic communications session with Koteret Public Relations.

The awards contributed to the sense of optimism that was felt at the IVA conference. The number of participants rose to 670 this year, the organizers said. Significantly, 150 of those were from outside Israel, indicating a renewed interest in the local market abroad. To cater to the international crowd, the majority of speeches were made in English. Last year, the event was conducted entirely in Hebrew.

This year’s conference was entitled “On the Threshold of Hi-Tech Renaissance.” Last year’s conference, in contrast, featured panel discussions with titles like “Where did We Go Wrong?”

According to Peres, approximately $1 billion was invested in Israeli hi-tech companies during 2003. The country is second only to the US in terms of the number of start-up companies, and has become a primary focal point for international investors.

“2004 will be one of the best years ever for venture capital investment in Israel,” Jerusalem Global Ventures founding partner Shlomo Kalish, told Globes.

Kalish believes that growth will be concentrated in four sectors, will reach very large proportions, and will continue for many years. He denied that his projections were like the inflated forecasts of the boom era.

“Analysts made mistakes in the past, but the feeling is that this time, they’re right,” he stated. “A billion people have mobile telephones, and the number will reach two to three billion within five years. Just the devices that will be purchased in the next three to four years will generate a trillion dollars in revenue,” Kalish predicted. He said the same thing was true in consumer electronics, and in what is being referred to as the digital home. The fourth field he mentioned, which he claimed was being undervalued, was homeland security tools for fighting terrorism, which would include the development of new technologies.

A quick look at the winning companies in the IVA Start-Up competition display a diverse field of investment opportunities.

Ultrashape is developing a non-invasive alternative to liposuction, the most commonly performed cosmetic procedure that was carried out 675,000 times last year in the United States alone. In contrast to invasive surgical procedures in which unwanted fat is physically extracted, Ultrashape’s transdermal application of ultrasonic energy causes the targeted rupture of fat cells. Residual fat tissue is cleared from the body through natural processes, resulting in a safe outpatient procedure to replace liposuction, which must be performed under general anesthesia in the United States, and carries the risks and potential complications associated with surgery.

“The inherent safety of our method lies in the fact that we actually only do half the traditional job compared to liposuction, and let nature do the rest,” said Yoram Eshel, co-founder and Managing Director of Ultrashape. “Physiological clearance of lysed fat tissue occurs over a period of about three weeks following the procedure, similar to the way the body clears out damaged tissue found in a bruise.”

Ultrashape’s solution consists of an ultrasonic transducer, developed in house, which targets and destroys fat cells without the risk of thermal damage, a potential hazard associated with some forms of liposuction. The transducer provides dual functionality, also serving as an ultrasonic guidance system that works in conjunction with an accompanying video imaging system, enabling precise localization of treatment. “We have developed a guidance system that dramatically reduces the potential for human error during the treatment, and is in sharp contrast to liposuction, which is sight and touch-guided,” Eshel said. “In addition, it will be possible for a physician to start the procedure, establish the boundaries of the treatment area, and turn the bulk of the actual procedure over to a technician, much in the same way the hair removal treatments are performed today.”

Wisair – the winner in the Communications category – develops and markets a high performance wireless communication chipset solution, based on UWB (Ultra Wide Band) technology. This chipset enables the implementation of low cost, low power, and high bit-rate communication modules and system solutions for the fast emerging home/office connectivity market.

Ultra Wide Band (UWB) is a revolutionary technology with incomparable potential in terms of throughput, performance and low cost implementation. The uniqueness of UWB is that it transmits across extremely wide bandwidth of several GHz, around a low center frequency, at very low power levels. This enables the unlicensed reuse of this valuable spectrum. Other indoor wireless technologies transmit across very narrow bandwidths of a few tens of MHz, using significantly higher power levels. Historically, UWB was widely used in military communication and radar applications, and now, thanks to progress in silicon technology, it can be customized for commercial applications, at very low cost. In 2002, the Federal Communications Commission (FCC) issued a First Report and Order for UWB technology, which authorizes the commercial deployment of UWB technology.

In the Software and IT category, the winner was Jerusalem-based Zoomix. Zoomix is positioning itself to create and become the global standard for intelligent data mastering systems. The company’s technology keeps business information resources clean and reliable by unifying original and consolidated resources, clearing them of redundant information and preventing data pollution. The field-proven, enterprise software enables organizations to communicate and share data freely, without altering established work procedures or existing terminology.

The company develops data collaboration technology that enables businesses and other organizations to easily organize and present information, and exchange it with the outside world. Its solution consists of two applications: HoneyComb and B-Miner. HoneyComb creates an open data-sharing environment for organizations by translating and synchronizing data from dissimilar sources through a centrally-located master source. Zoomix B-Miner is an aggregation application for gathering, organizing, improving, and expanding disparate content from virtually any web site. It enables dynamic content updates and data format conversions to provide purchase information on products and services.

In the field of homeland security, the judges were taken with Aspectus, a company which provides state-of-the-art video intelligence products. Especially designed for large video surveillance networks (from tens up to thousands of distributed cameras), Aspectus’s technology automatically detects various events such as intruders, suspected cars or persons, smoke and fire, or safety hazards by “opening the eyes” of millions of non-effective cameras now installed worldwide.

The company’s patent pending core technology called MCIP (Massively Concurrent Image Processing) offers a distributed image processing architecture and is designed for networked surveillance. Its product line the VISystem includes all the building blocks required for a large-scale digital video surveillance system with real time detection capabilities. Its first application is called the VI-Object Tracker, and according to the company is the only product on the market that enables multiple simultaneous event detection applications for large numbers of cameras in a cost-effective manner.

Not only looking ahead, the IVA also looked at past and current achievement by honoring Israeli visionaries Yossi Vardi and Avigdor Willenz with their Israel hi-tech award. It was a fitting end to a conference that stoked the fires for the entrance to another golden era for the Israeli startup industry.