What drove us to the Israeli startup ecosystem?

InnoCells
InnoCells
Nov 5 · 3 min read
Tel Aviv (Israel)

As the corporate innovation arm of Banco Sabadell, one of InnoCells’ key objectives is to act as a radar for emerging technologies that can enable our parent company to increase the efficiency of backend processes, and expand or improve the offering to our client base. With this aim in mind, Israel represents one of the most significant tech ecosystems worldwide and is perhaps the global leader in deep tech.

It is therefore unsurprising that we identified it as a key location to establish Banco Sabadell’s scouting capabilities — prior to last year, the bank did not have a direct connection to the local tech scene. Whilst some business units were already working with a couple of more mature companies, the organization could draw much greater value from the grassroots innovation in the country, gaining earlier exposure to upcoming market trends and ground-breaking solutions.

However, the Israeli market is far denser than its European counterpart, and as a result of the Israel Defense Forces (IDF) background that the majority of entrepreneurs (and investors) share, it is heavily driven through network, and Banco Sabadell was entering as an outsider. Hence, in order to acquire local knowledge and gain access to the ecosystem, we decided to approach the opportunity alongside an established partner.

Our entry into the Israeli market

Following InnoCells’ first visit to Tel Aviv in May’18, we selected Cardumen Capital, a European Venture Capital and Private Equity Company with presence in both the local and Spanish markets, as the partner to enable us to maximize strategic value.

The Cardumen team, led by Gonzalo Martínez de Azagra and Igor de la Sota, had previously managed Samsung Ventures’ activity in Israel, growing it into the most active corporate investor in the country. Following the limited partnership in the firm, we began to work closely together, analyzing opportunities both for investment and commercial agreements with Banco Sabadell.

In this time, Cardumen Capital has led workshops with several of the bank’s departments, identifying key focus areas and introducing relevant solutions. The InnoCells team has also returned to Israel on numerous occasions, strengthening our brand and links in the ecosystem and scouting additional companies.

In Sept’19, we announced our first direct investment in the cyber risk modelling startup, Kovrr — a deal that Cardumen brought to the table (as partner Roy Gottlieb had coincided with one of the co-founders, Avi Bashan, in IDF intelligence). This investment will bring the impressive team’s deep technological expertise closer to Banco Sabadell and facilitate the exploration of the rapidly growing cyber-insurance market. We are delighted to have co-invested in the deal led by local fund StageOne as well as our colleagues from Alma Mundi and are excited to work alongside them to accelerate Kovrr’s development.

Moving forward, we’re keen to collaborate with more partners in the local ecosystem and are actively searching for companies in the wider fintech space that are ready to deploy with an organization such as ours.

Does that sound like you? Share your deck with us at investments@innocells.io.

InnoCells Insights

InnoCells is the corporate venture arm and innovation hub of Banco Sabadell. We lead the company’s strategic digital agenda and execute strategic digital investments, which include both Corporate Venture Capital and Digital M&A efforts.

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