By Sara Miller, NoCamels -
A decades-long collaboration between the Israeli and American governments is not only promoting innovation in the two countries, but is itself an innovative way of offering a helping hand to both sectors.
The BIRD (Binational Industrial Research and Development) Foundation, which was established in 1977, serves as a “matchmaker” between companies from Israel and the US for a cooperation that works for both participants.
“The idea is that there’s assets in the technological ecosystems in both countries that when encouraged to work together, can create value for both countries,” BIRD Executive Director Jaron Lotan tells NoCamels.
The foundation is government funded on both sides, and offers every collaboration a grant of up to $1.5 million, which is paid back if and when the joint venture turns into a successful commercial endeavor.
Although the foundation’s funds come from state coffers, it acts as an independent entity with a board of directors – albeit one that does include representatives from both governments – whose sole goal is encouraging and supporting bilateral ventures.
The foundation operates in both the US and Israel, although the majority of the small team works out of Tel Aviv, with three personnel dotted about the United States.
In its early years, the foundation’s focus was on helping nascent Israeli companies team up with more established US companies in order to break into a specific segment of the immensely bigger and more lucrative American market, Lotan explains.
This was not just assistance vis-a-vis sales, he says, but also in helping the Israelis better understand the US market and how to better adjust their “great inventions and technology” to its requirements.
Over the decades, however, the tech sector in the so-called Startup Nation flourished and the American company was no longer the larger, senior partner by default, Lotan says.
“We still see Israeli startups working with bigger US companies [but] we see large Israeli companies working with young US companies,” he says.
“We [also] see startups from both countries working together because they have complementary technologies that make them stronger together.”
BIRD Deputy Executive Director of Business Limor Nakar-Vincent explains that while there may be an imbalance in terms of size, stage of development or even accessible funding between the Israeli and American partners, each side plays its own crucial role in accelerating the development of the project and bringing it to market.
One example of a major, established Israeli company working with a smaller American startup is the current BIRD-backed collaboration between Israel Aerospace Industry (IIA), the state-owned aviation giant, and Virginia-based MELD PrintWorks, which specializes in 3D printing.
The two have teamed up on an innovative project to 3D print high-quality, large metal components for civil aviation applications. The technology addresses critical industry challenges, and is expected to significantly reduce production costs, lead times and material waste, BIRD Director of Business Development tells NoCamels.
And without BIRD, says Lotan, the small Virginian startup would have found it “very difficult” to enter into an agreement with such a leading company as IAI.
Conversely, BIRD helped to broker a partnership between Celleste Bio, a Misgav-based startup that is cultivating cocoa beans in the lab, and American multinational Mondelez, one of the largest food companies in the world.
Thanks to this partnership, Mondelez, whose portfolio includes global chocolate brands such as Cadbury, Milka, Côte d’Or and Fry’s, is today Celleste’s strategic investor, and, according to the Israeli startup’s CEO Michal Beressi Golomb, “a great partner.”
And even though Mondelez is a massive multinational, it is BIRD’s platform that provides the framework and structure to enter into an agreement with Celleste in a mutually beneficial way, explains Lotan.
“That’s really what’s unique about the platform,” he says.
Companies can either be introduced by BIRD in order to maximize their synergy potential or can team up unaided and then apply for a BIRD grant. And the foundation remains involved in the partnership, with the funding being provided in increments, based on milestones that are set out for the collaboration.
“We don’t just give them a grant and walk away,” says Lotan.
The foundation also takes heed of trends in and demands of the tech ecosystem, he says.
In 2009, BIRD began to expand into what he calls “vertical programs,” that focus on specific areas within the sector. There are currently four such programs – two in the field of energy, one in homeland security and another in cybersecurity for critical infrastructure.
Aside from BIRD’s own financial support, the four programs also receive funding from “relevant stakeholders” in both governments. For example, the energy projects are financed by the US Department of Energy and the Israeli Ministry of Energy and Israel Innovation Authority.
The call for proposals for the cyber program was set to be issued this month, followed soon after by the one for the homeland security program.
The foundation’s success rate is high, according to Nakar-Vincent, with 70 percent of the projects it supports achieving commercial success and 30 percent of them actually repaying their grants.
As a non-profit, any revenue that is accrued is funneled directly back into grants for new bilateral partnerships. And with an endowment of some $150 million, the foundation gives grants to the tune of around $35 million per year.
“The idea in the end is to bring together companies that can work together,” says Nakar-Vincent. “Each one of them can add value to one another, and we are here to support them through the process.”
