Israeli Startups are Taking China by Storm as Investors Target Israeli Solutions

“Thousands of Chinese investors are seeking strategic investment in Israeli startups,” Edwards You Lyu, CEO of Vadi Ventures, a Tel Aviv-based company aimed at supporting Chinese investments in Israeli startups, said in a statement.

As reported in No Camels;

At first glance, the two nations couldn’t be more different. One is a tiny country in the Middle East with a population of just over 8.5 million, while the other is one of the largest countries in size and the world’s most populous, with 1.38 billion people. Despite their differences, ever since Israel and China established diplomatic relations in 1992, the two countries have steadily drawn closer to each other, partly thanks to Chinese investment in Israeli startups.

Once unheard of, Chinese investment in Israeli companies has now become commonplace. A recent example is Fosun Pharmaceuticals, a division of one of the biggest companies in China, which bought Israeli cosmetics maker Ahava Dead Sea Laboratories for a reported $77 million.

Here are five Israeli high-tech companies have attracted the attention of major Chinese investors:

Visualead: ‘Designer’ QR codes

Many large Chinese firms and investors are already doing business in Israel. Giant online retailer Alibaba, for example, has invested in several Israeli companies, including Visualead, whose technology enables product manufacturers to print labels with unique QR codes for each individual product package.

QR codes are images for mobile devices that are used as “shortcuts” to reach websites, and Visualead’s technology utilizes aesthetic shapes and colors to create ‘designer’ QR codes that can be made to order products.

While the use of QR codes for mobile marketing is widespread across the globe, they’re especially popular in China due to their social network and app connectivity. Based on Visualead’s experience, consumers are four times more likely to scan a visual QR code than a regular black and white QR code, according to the company.

Pixellot: A new way of filming

Baidu, the Chinese company sometimes called the Chinese Google, invested $3 million in the Israeli video-capture firm Pixellot, which has developed a unique method of filming — the unmanned “capture-all” system, which deploys cameras to capture all angles and views of a venue. Pixellot is known for its high-quality and affordable alternative to traditional video capture and production processes, opening the way to a new era in sports and music video production.

“We’re very enthusiastic about bringing Pixellot’s ground-breaking technology to Chinese Internet users,” Peter Fang, senior director of Baidu Corporate Development, said in a statement. “For the first time, video content producers can broadcast concerts, sports, and stage events and enable the audience to watch streaming video with total freedom to choose camera angles in real time on their devices. We think this will revolutionize video content production.”

AutoAgronom: Saving water, one drop at a time

Another Chinese company that dove into the Israeli tech market was Yuanda, which in 2014 bought Israeli agricultural technology startup AutoAgronom, and last year invested another $180 million in it. With the investment, AutoAgronom is setting up a factory in China to manufacture autonomous irrigation systems and distribute them throughout China.

AutoAgronom is a major player in the world of smart, autonomous irrigation systems. Its products are currently used in 13 countries and the company asserts that it is an expert in improving efficiency of water and fertilizer usage for environmental protection. Its intelligent drip irrigation system makes it possible for 95 percent of the liquid to be absorbed and various targets to be monitored. With the help of the system, the water consumption for each acre plunges from 500 tons to 150 tons.

Tonara: Music education software

In China, performing classical music is seen as a status symbol for the rising middle class. An estimated 40 million children there are learning to play the piano. Perhaps this explains why Chinese Internet giant Baidu, China’s largest search engine, invested $5 million in Tonara, an Israeli music education software company.

Tonara, which was founded by Evgeni Begelfor and Yair Lavi in 2008, combines audio signal analysis with proprietary algorithms to enable computers to understand notes in live or recorded music. Tonara’s mobile app can follow any number of notes played simultaneously on any number of different instruments, track the user’s current position in the score even if he or she changes tempo or makes a mistake, and turn the page at the right moment.

It can also match any note in a score with the corresponding note in a session recorded on the Tonara app, called Wolfie, so musicians don’t have to rewind or fast-forward through audio playback in order to find passages they need to listen to or practice.

ThetaRay: Keeping us safe from cyber threats

Aibaba also invested in Israeli cyber-security startup ThetaRay. Founded in 2014 by Prof. Amir Averbuch of Tel Aviv University and Yale’s Prof. Ronald Coifman, the company has developed a solution to detect and prevent APT (Advanced Persistent Threat) and zero-day attacks (a hole in software that is unknown to the vendor) within minutes from the moment they occur.

As to the future, tightening the business relations between China and Israel could contribute to both nations. “For political reasons, we were apart for many years, but now China is very open,” E Hao, Co-CEO of GWC, the Chinese company behind this year’s Global Mobile Internet Conference (GMIC) in Tel Aviv, tells NoCamels. “But as long as the two countries have more understanding, opportunities happen.”

Following conferences in Beijing (with half a million attendees), Tokyo, Jakarta, Bangalore, San Francisco, Sao Paulo and Taipei, choosing Tel Aviv as the next venue for GMIC was a no-brainer for Hao. “50 CEOs from China came here, including a private jet with seven Chinese CEOs – that’s unprecedented,” he says. “A similar event in a major North American city wasn’t able to attract as many Chinese CEOs as the Tel Aviv event did. Israel is very attractive to Chinese businesses.”

As the Chinese-Israeli business cooperation continues to expand, one can only imagine what new experiences await us.

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