Remapping Israeli Automotive Landscape

By: Emanuel Timor & Liran Hason — Vertex Ventures

A year has passed since we first published the Vertex map of Israeli start-ups that are trying to make an impact on the automotive industry. Much has happened since then and we would like to share our updated map.

The updated Israeli landscape of Automotive 2.0

During this year we had witnessed the following main trends:

Financing Rounds — Automotive Israeli start-ups raised close to $350M since we published our first map in June 2016. Companies in the fields of Autonomous Driving and Connect Cars raised the highest amount out of all sectors.

Mega fund raising continued to dominate the sector. Two chip vendors -Valens and Autotalks, raised together close to $100M while LIDAR vendor Oryx Vision raised $50M. Those three are hardware focused and this is the case for many of the Autonomous driving companies. This may signal the return of hardware as a major investment theme in Israel — at least in automotive.

Surprisingly, the amount raised during this period is significantly lower than the amount raised in the previous 12 months. This is mainly because the previous year amount included more than $400M that were raised by two ride services companies, Gett and Via. When excluding these two rounds of financing from the previous year data the trend changes to a growth of more than 50% in the amount raised in the last year.

Global Interest — Automotive Tier 1 vendors are the most important investor in the Israeli scene. Magna International, Delphi and Samsung are among the most active investors. In addition to their value as financial investor, these vendors help Israeli start-ups get closer to market with strategic partnerships and access to the car vendors, the OEMs.

Newborn companies — It is amazing to see the increase in the amount of newborn companies since June 2016. These companies are active across all sectors, ranging from new security vendors to optimization solutions for fleets, public transportation and smart cities. An impressive amount of them had already secured their first significant round of financing.

Three global mega trends are driving the automotive and mobility industries towards Automotive 2.0 — Autonomous & Connected cars, Ride Services and Electric Vehicles (EVs). In the area of EV, no Israeli company has managed to raise a significant round of financing, apart from a rumored large round of StoreDot. Traditionally, most investors in Israel shy away from the field of alternative energy.

The fact our map is changing faster than ever, reflects the fact we are lucky to witness and take part in the revolution of transportation. This is a great opportunity for start-ups in general and for Israel’s entrepreneurs in particular. Nonetheless, it won’t be an easy ride as the time it takes start-ups to break into the automotive industry and reach significant revenues, is much longer compared to other industries. So just like with Mobileye — being patient, but at the same time thinking big is what makes automotive 2.0 more than a hype, but rather a reality.

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