Grove Ventures
Published in

Grove Ventures

Mapping the Israeli Industry 4.0 Ecosystem

Industry 4.0 is a term which refers to the fourth industrial revolution, introducing advanced manufacturing techniques, combined with artificial intelligence to create automated manufacturing processes. The transition towards the factories of the future was initially led by global enterprises such as GE, IBM, and Cisco. Nowadays, however, startups are at the forefront of the industry, offering a wide range of innovative solutions such as sensors, cloud platforms and machine learning systems.

Grove Ventures, a leading Israeli venture fund, together with Start-Up Nation Central, a nonprofit connecting companies to the Israeli startup community, conducted comprehensive research mapping more than a hundred local startups which operate in the Industry 4.0 ecosystem. The companies were divided into ten major categories, as seen in the following infographic: Operations Optimization; 3D Printing; Safety and Health; Robotics; Inspection and Testing; Supply Chain; Sensing and Imaging; Maintenance; Platforms and Connectivity; and Cyber Security.

This is the second year in which Grove conducts its research on the development of Industry 4.0 in Israel, identifying 3 major trends:

1. An increase in the number and size of startups operating in the Industry 4.0 field in Israel: Our team identified a 20% increase in Israeli startups operating in the field compared to last year, making Israel the largest hub for Industry 4.0 innovation outside the US (as presented recently in a research by Startup Nation Central and Deloitte). Many startups are scaling their teams, while others were able to reach a significant revenue stream, allowing further growth. Israeli entrepreneurs are unique in their reliance on the country’s core technological capabilities such as cybersecurity, sensing and data science. Instead of trying to solve pre-defined problems, Israeli entrepreneurs apply their expertise and offer innovative solutions to problems that the industry is not even aware of. For that reason, we see a strong presence for startups in the Operations Optimization and Cybersecurity categories.

2. A global interest in the Israeli Industry 4.0 scene: As the industry matures and the ecosystem’s growth rate accelerates, many industrial corporates are opening a new CVC arms and additional VC funds are willing to place bets on industry 4.0 startups and provide further growth stimulants. The research showed that Israeli Industry 4.0 startups have received a total of $200 million in VC funding in 2017. A number of noticeable acquisitions of Israeli startups were made by key international corporations, including GE Digital’s acquisition of two Israeli startups and Honeywell’s acquisition of an industrial cybersecurity startup. International corporate are also opening local development and scouting operations in the country. Siemens, which opened an Innovation Lab in Tel-Aviv named Dynamo soon after GE’s similar move, is one example for the trend. In addition, the Israeli Innovation Authority initiated five new technological innovation labs which will be operated by local and foreign industry leaders, including Enel, Shikun & Binui, Ham-Let Group, Renault-Nissan, Merck Performance Material, Flex and Frutarom. Grove Ventures is also taking part in the innovation wave by operating the Infra Lab with Enel and Shikun & Binui and Let-Lab with Ham-Let Group.

3. This is only the beginning: GE recently predicted that investments in Industry 4.0 would top $60 trillion within the next 15 years, and McKinsey estimated that Industry 4.0 solutions are estimated to sell ±2–4 Trillion in 2025. Grove predicts that with additional investments, knowledge and market maturity, future Industry 4.0 innovation companies in the country will tackle specific industry needs, faster and better, allowing them to thrive in the new digital era.

Grove Ventures concludes that in coming years many new startups will join the Industry 4.0 era, while others will mature and develop into growing businesses. These startups are going to build a larger and more solid foundation for the technology and therefore allow major VCs and corporates to sharpen their Industry 4.0 portfolios and offer a range of new solutions and products.

--

--

--

Grove Ventures is a leading VC fund. We partner early with exceptional Israeli entrepreneurs who believe that the Deep Future is now & are ready to build it.

Recommended from Medium

What Technology Disruption Always Does For (or To) Your Business

Boston Scientific Corp: A good Healthcare Growth Play in the Medical Device Space

Marriott launches media network powered by Yahoo

Fast-tracking Digital Initiatives using RPA’s Digital Workforce

What is the most important thing we learnt in eCommerce in 2019? Our eCommerce Experts discuss

Mobile, Alabama — A city with a storied past and potentially promising future.

How Anderson Souvenir LLC, a local Asian American owned business, has taken on the effects of the…

5 digital challenges for CEOs in 2020

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Lotan Levkowitz

Lotan Levkowitz

General Partner @ Grove Ventures

More from Medium

Why we need both gender lens and climate lens in angel investing

Antimemetics: An Investigation

A Framework for the Future: SustainAbility

Nature restoration and carbon removal are not the same. Here’s why it matters