IMPACT-TECH Archives - Startup Nation Central https://startupnationcentral.org/tech-innovation/impact-tech/ Your gateway to Israeli innovation Tue, 24 Sep 2024 12:00:56 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.1 https://startupnationcentral.org/wp-content/uploads/2023/12/cropped-startupnationfavicon-2-32x32.png IMPACT-TECH Archives - Startup Nation Central https://startupnationcentral.org/tech-innovation/impact-tech/ 32 32 Pioneering Israeli Social Impact Tech Companies https://startupnationcentral.org/blog/impact-tech/pioneering-israeli-social-impact-tech-companies/ https://startupnationcentral.org/blog/impact-tech/pioneering-israeli-social-impact-tech-companies/#respond Tue, 24 Sep 2024 11:38:00 +0000 https://startupnationcentral.org/?p=32984 Corporate Social Responsibility (CSR) involves businesses taking responsibility for their social impact, beyond making profits. This includes a range of activities such as sustainable business practices, ethical labor practices, philanthropy, environmental efforts, and contributing to the economic and social development of communities. In today’s business landscape, CSR is crucial for a company’s reputation and long-term […]

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Corporate Social Responsibility (CSR) involves businesses taking responsibility for their social impact, beyond making profits. This includes a range of activities such as sustainable business practices, ethical labor practices, philanthropy, environmental efforts, and contributing to the economic and social development of communities.

In today’s business landscape, CSR is crucial for a company’s reputation and long-term success. Consumers and stakeholders increasingly demand that companies operate ethically and contribute positively to society. CSR enhances brand loyalty, attracts better talent, and can even lead to cost savings through sustainable practices.

Technology for Social Impact

Technology serves as a powerful tool in addressing complex issues efficiently and innovatively. Social impact technologies span various sectors, each addressing critical societal challenges with innovative solutions. 

  • Agritech enhances agricultural productivity and sustainability; for instance, precision farming drones can analyze soil health to minimize pesticide use, and automated irrigation systems can reduce water waste. 
  • Food tech aims to improve food security and nutrition; consider vertical farming bringing fresh produce to urban areas, or lab-grown meat reducing the environmental impact of livestock farming. 
  • In climate tech, innovations like carbon capture devices can reduce greenhouse gases, while smart grid technologies can optimize energy consumption, lowering carbon footprints. 
  • Health tech improves healthcare delivery and outcomes; wearable health monitors can provide real-time tracking of chronic conditions, and AI-driven diagnostics can speed up disease detection. 
  • Edtech broadens access to quality education; online learning platforms can offer personalized curriculums to remote learners, and gamified learning apps can engage students in underserved areas. 

Each of these examples demonstrates how targeted technological advancements can drive significant social change, meeting urgent global needs effectively.

Leading Israeli Social Impact Tech Companies

Israel, known as the Startup Nation, boasts a vibrant tech ecosystem characterized by a high concentration of startups, cutting-edge research, and substantial venture capital investment. With a strong emphasis on innovation and entrepreneurship, Israel has become a global leader in various tech sectors.

Israeli companies are making significant strides in social impact tech, tackling pressing global issues through bold and determined innovative solutions; Startup Nation Central provides frictionless access to this local tech expertise, fostering collaborations that amplify the impact of these solutions globally.

Here are some of the companies making a major impact with tech:

OrCam

Description: Develops assistive technology devices for the visually impaired.

Impact: Enhances the quality of life and independence for visually impaired individuals by providing portable, AI-driven devices that read text, recognize faces, and describe the surrounding environment.

Watergen

Description: Produces atmospheric water generators that create drinking water from air.

Impact: Addresses water scarcity by providing clean and safe drinking water in arid regions and disaster-stricken areas globally.

TytoCare

Description: Offers telehealth solutions enabling remote medical examinations.

Impact: Improves access to healthcare, especially in underserved and remote communities, by allowing patients to conduct medical exams at home and share the data with healthcare professionals.

ECOncrete

Description: Develops environmentally friendly concrete solutions.

Impact: Supports marine biodiversity through eco-friendly infrastructure solutions that also contribute to sustainable coastal development.

Innoviz Technologies

Description: Advanced LiDAR and perception technology for autonomous vehicles.

Impact: Enhancing transportation safety and reducing environmental impact.

Insights and Future Outlook

The Israeli social impact tech sector continues to thrive due to robust support from both private and public sectors, fostering an environment where innovation can flourish. Recent trends indicate increased investment in sectors like health tech and climate tech, reflecting global priorities and local strengths.

Challenges and Opportunities

While the sector faces challenges such as funding constraints and market adoption, it also presents vast growth opportunities. Strategic partnerships, government support, and continued innovation are key factors that can help overcome these obstacles and drive substantial social impact.

Looking Forward

The future looks promising for Israeli social impact tech, with boundless potential for scaling existing solutions and developing new technologies. By continuing to leverage Israel’s unique strengths in innovation and collaboration, the sector is set to make even greater contributions to addressing global challenges.

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Start-Up Nation Central hosted 8 UN ambassadors who came to learn about Israeli sustainability solutions https://startupnationcentral.org/blog/impact-tech/start-up-nation-central-hosted-8-un-ambassadors-who-came-to-learn-about-israeli-sustainability-solutions/ Wed, 22 Dec 2021 06:00:03 +0000 https://startupnationcentral.org/all-posts/start-up-nation-central-hosted-8-un-ambassadors-who-came-to-learn-about-israeli-sustainability-solutions/ Israeli startup companies showcased their technologies to the delegation led by Israel's Ambassador to the UN Gilad Erdan, emphasizing emerging markets partnerships and solutions.

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Israeli startup companies showcased their technologies to the delegation led by Israel’s Ambassador to the UN Gilad Erdan, emphasizing emerging markets partnerships and solutions.

A delegation of ambassadors to the UN from 11 countries concluded their 5-day visit to Israel on Tuesday with a professional review of Israeli innovation technology focusing on climate and sustainability solutions by Start-Up Nation Central.

The high-level diplomats visited the non-profit organization’s headquarters in Tel Aviv to learn about the strengths of the Israeli innovation ecosystem and how it is addressing the Sustainable Development Goals (SDGs) adopted by the United Nations.

The delegation that included ambassadors to the United Nations from Argentina, Albania, Croatia, Uruguay, Ecuador, Republic of Korea, Hungary, Nauru, Palau, Samoa, and Zambia participated in a tour hosted by Israel’s Ambassador to the UN Gilad Erdan.

Start-Up Nation Central Chairperson, Terry Kassel welcomed the distinguished visitors and urged them to use the organization as a resource in their search for game-changing technologies.

“One of my main goals at the United Nations has been to illustrate how Israeli innovation is helping people all over the world. After spending a week in Israel, the ambassadors were able to see the innovative spirit that is infused throughout the people,” Erdan said. “Bringing the delegation of ambassadors to Start-Up Nation Central was the perfect way to cap off this trip and I am confident that they will be strong advocates of partnering with Israeli companies in the future, both at the UN and in their home countries.”

“In Israel today, there are over 1,000 companies that offer diverse technological solutions to support global sustainable development in both societal and environmental arenas. These technologies provide an answer to the UN’s ambitious goals in the areas of sustainability and can significantly assist in overcoming the global challenges we all share,” Start-Up Nation Central CEO Avi Hasson told the delegation. “I urge you to challenge us, the Israeli ecosystem, with your country’s obstacles and together we can offer solutions to address them.”   

Start-Up Nation Central Chairperson Terry Kassel, Israel’s Ambassador to the UN Gilad Erdan and Start-Up Nation Central CEO Avi Hasson. (Credit Achikam Ben Yosef)

During their visit, Hasson presented the diplomats with an in-depth review of the Israeli technological innovation ecosystem. The visitors also received innovation demos by Israeli startup companies who showcased their technologies, emphasizing emerging markets partnerships and solutions towards achieving the UN’s SDGs.

Among the Israeli Startups that presented were:

  • Spark Beyond – Applies AI analytics to help solve the world’s most pressing needs across various industries
  • Tomorrow.io – Manages weather-related challenges for people and organizations with real-time data and AI insights.
  • DouxMatok – Offers improved nutrition through its sugar-based sugar reduction, enabling tastier and healthier consumption of sweet foods.
  • Hargol– Specializes in growing grasshoppers as an alternative protein source. The company’s products include whole grasshoppers and grasshopper protein powder sold as an ingredient to food producers in Europe and the US.
  • Homebiogas – Produces anaerobic digesters for home use that convert organic waste into methane gas and liquid fertilizer.
  • Innovopro – Brings plant-based protein ingredients, such as chickpea protein, to the global food market to create nutritious, flavourful, and sustainable food products. 
  • N-Drip – Develops a gravity micro-irrigation system that utilizes existing flood irrigation infrastructure to provide efficient drip irrigation.
  • ZeroEgg-Develops a nutritious, zero-cholesterol, plant-based liquid egg substitute that tastes, looks, and functions like a real egg and can be used in any recipe

These and hundreds of other companies that are active in the sustainability space can be found on Start-Up Nation Finder, the free online platform for identifying and engaging with Israeli tech organizations.

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Israeli Innovation is Offering Solutions to Global Health and Wellbeing Challenges https://startupnationcentral.org/blog/impact-tech/israeli-innovation-is-offering-solutions-to-global-health-and-wellbeing-challenges/ Wed, 15 Dec 2021 07:14:28 +0000 https://startupnationcentral.org/all-posts/israeli-innovation-is-offering-solutions-to-global-health-and-wellbeing-challenges/ Israel’s innovation ecosystem is optimally positioned to address the particular challenges associated with the UN's SDG #3

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A thriving and healthy human population is essential for ensuring a sustainable world. Out of the UN’s list of 17 Sustainable Development Goals (SDGs), it is fair to say that one of the most heart-wrenching and urgent topics, particularly as we experience a global pandemic, is the one addressed by SDG #3: ensuring healthy lives and promoting wellbeing for all people at all ages.

The COVID-19 pandemic has not only caused the obvious suffering related to a sudden, widespread illness, it has also impaired the ability of our health care systems and services to deal with many other health-related challenges. With resources diverted to the pandemic response, we are seeing new outbreaks of other deadly diseases such as TB, HIV, and malaria. Vulnerable populations such as women, children, lower socioeconomic strata, and the elderly, have been disproportionately affected by the pandemic, exposing the structural weakness of our economic and health systems. 

Complex Problems Require Innovative Thinking

Although some advancements towards the ambitious goal had been achieved in various health areas prior to 2019, the disruption caused by the pandemic has now slowed progress and even reversed some gains made. According to a recent survey by the WHO, about 90% of countries and territories still report one or more disruptions to essential health services. Due to the unprecedented strain on global health systems, the amount of resources being diverted to the pandemic response, and the added burden of sporadic lockdowns disrupting regular access to healthcare facilities, technological innovation has never had a bigger role to play in working to overcome these challenges. 

Impact Investments in the Health Sector

While addressing the unique challenges of this SDG certainly requires the leadership of governments, a combination of creativity, expertise, technology, and financial resources is necessary to completely achieve the aims of the SDG. Indeed, Impact Investors are hearing the calling: according to Pitchbook, $39.5B was channeled worldwide into health care services companies with impact targets from 2017 through March 2021. Health is the second strongest sector for impact investments, after energy.

SDG 3 & Israeli Tech

Although some of the technological solutions required to address these pressing issues already exist, they still require rapid commercialization to achieve large-scale implementation and there is an immediate need to expedite the innovation and commercialization processes, in addition to adapting legislation and lifting other practical barriers.

Israel’s innovation ecosystem is well-positioned to address the particular challenges associated with this SDG: The following solutions are only a taste of the technologies being developed in the country.

  • Maternal Health: Heramed provides connected pregnancy monitoring solutions for in-home use, which were originally aimed at consumers as an OTC wellness product. The company has started working with hospitals, including in emerging markets like Brazil, Turkey, and India, to bring remote pregnancy monitoring to rural hospitals which lack expensive professional equipment. 
  • Combating infectious diseases: 
    • Keheala operates a mobile healthcare infrastructure that utilizes behavioral science for addressing the non-medical drivers of disease that exist outside of clinical settings. The company operates in Kenya, South Africa, and Zimbabwe, and plans to expand into many additional African and Asian countries. Its current use cases include TB and HIV, as well as other non-infectious diseases. 
    • Nearly 700 million people contract mosquito-borne illnesses each year, causing more than one million deaths. To address this growing health risk, a number of Israeli companies are tackling the spread of mosquito-borne diseases including Forrest Innovations, Diptera.ai,  Must-Quito, Senecio Robotics, Westham Co., and  Zzapp Malaria – who recently won the IBM AI XPrize
  • Facilitating access to basic health care and coverage: eWave MD, a well-established Israeli company, offers telemedicine solutions for primary care in remote areas, remote consultation and monitoring, and more. MobileODT developed an optical diagnostic technology for women’s health; its connected portable colposcope can be used for remote diagnostics and consultation everywhere, helping detect cancer at its earlier stages, among other health conditions. A similar solution developed by Illumigyn enables women to carry out remote gynocoligal examinations and consult with physicians anywhere in the world to help with early detection of cervical cancer. The company recently signed a contract with Nigeria-based PeraMare Enterprises to distribute 20,000 devices. K Health is disrupting the American market with its 24/7 mobile healthcare platform that is also accessible for the uninsured population. The company has raised $274M in funding and has a valuation of $1.6B (a true ‘unicorn’ company).

The SDGs and the Israeli tech ecosystem

Start-Up Nation Central elevates the Israeli innovation ecosystem to meet the growing global demand for sustainability solutions and cultivates global partnerships that create business, social and environmental value on the ground. We are deeply committed to improving the conditions for SDG-related tech companies to shine.

Start-Up Nation Central has built a classification framework that translates all 17 of the  SDGs into indicators/challenges that can be addressed by leveraging technology, and that are intuitively investable. This allows us to identify the startups – and the more mature tech companies – that are incorporating the importance of a positive contribution to sustainable development into their core mission and strategy. 

Visit Start-Up Nation Finder to identify and connect with more than 1,200 SDG-related Israeli startups. Read our past blogs and find out how Israeli providers of ClimateTech and FinTech solutions are helping achieve other SDGs.

Lena Rogovin and Sigalit Lidai contributed to this post

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Israeli FinTech Innovators Helping Combat Global Poverty https://startupnationcentral.org/blog/impact-tech/israeli-fintech-innovators-helping-combat-global-poverty/ Wed, 10 Nov 2021 10:50:39 +0000 https://startupnationcentral.org/all-posts/israeli-fintech-innovators-helping-combat-global-poverty/ Financial services startups are playing a role in improving underprivileged populations’ access to banking

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Financial services startups are playing a role in improving underprivileged populations’ access to banking

Access to banking is something many people take for granted. But according to the World Bank there are nearly 1.7 billion people around the world with little or no access to any kind of formal financial services. In the US alone, over 6% of households in the US, a total of 14.1 million American adults, are considered “unbanked.”   

Poor access to financial services, whether in the case of the unbanked or the underbanked (those that have bank accounts but can’t access other services such as loans or insurances) is considered as one of the top generators of poverty, together with poor access to other essential services like education and healthcare. It is therefore clear that the UN’s blueprint for sustainable development includes the mandate to facilitate access to financial services as a key strategy to combat poverty globally (SDG 1 No Poverty). Achieving this would have a far-reaching effect, as a small loan, savings account, or an insurance policy can sometimes be a game-changing factor for people in need, such as a young adult applying for a loan to finish school or someone recovering from an illness. 

Impact Investors are Mobilizing to Eradicate Poverty 

In recent years, investors and tech entrepreneurs around the world have begun to realize there is an untapped opportunity in promoting the financial inclusion of underprivileged populations – both to meet their financial return targets, as well as create meaningful social impact. According to Pitchbook’s recent analysis of Impact Investments, financial services is the third most funded Impact area, after energy and health. Impact funds globally channeled over $35.1 billion dollars into financial services with impact targets from 2017 through March 2021. 

Israeli FinTech Leads the Charge on Financial Inclusion

Israel is a renowned industry leader in FinTech, Telecommunications, and Information Security, home to more ‎than 530 FinTech startups that leverage data science, ‎biometrics, blockchain, and cyber technologies to disrupt the traditional banking, finance, ‎and insurance sectors. Israel has all the right ingredients to innovate sustainable solutions to complex challenges. When translating the financial inclusion challenge into tech-investable areas, it refers mostly to mobile banking for the underbanked and unbanked, lending solutions, and personal finance management for underprivileged populations. These are all areas where Israel’s ‎technological strength shines‎. 

One example is the Israel-based mobile banking solution FIDO Credit that makes credit accessible to the unbanked in Ghana. Thanks to this platform, which makes instant credit available without requiring the customer’s credit history, business owner Mohammed Umoru was able to stop driving almost 100 miles in each direction to receive a loan for the raw materials he needed to develop his business. 

Another Israeli startup making headlines in financial inclusion is microcredit platform L-Pesa, enabling users to build credit history and providing instant cash based on AI data points and APIs. One example would be a woman in Uganda who is able to attain a credit line of $70, of which she utilizes roughly a third each morning – $20-25 – in order to buy mangos to sell throughout the day, repaying the loan in the evening and retaining her daily profit. With over 700,000 customers in Tanzania, Kenya, and Uganda, L-Pesa’s goal is to develop long-term relationships that are mutually beneficial to both the customer and the loan provider; L-Pesa incentivizes timely repayment and other financially responsible behavior by increasing available credit limits over time. 

Focused on enabling users in India, Kenya, Vietnam, and Mexico to build credit history, Israeli startup ConfirmU’s alternative credit scoring method collects data in a different way – building mutual trust through a three minute game with fun challenges involving varied nuances for different types of loans, such as agricultural versus urban lending. Then there is Innovative Assessments, which developed a method for evaluating credit risk based on psychometric scoring, testing for certain personal character and behavioral traits that can help determine risk factors and dependability; approximately 1.5 million users in twenty countries have taken this unique credit test. Working in conjunction with local banks and online lenders, this Israeli FinTech pioneer promotes economic success for small business owners and provides access to higher education through more accessible student loans. 

In this context, it is worth noting college planning platform Frank, recently acquired by JPMorgan. The online portal offers tools that help students apply for and negotiate financial aid, enroll in online courses, and find scholarships. Since its launch in 2021, it has served more than 5 million students at 6,000 institutions.

Lastly, we have personal finance management company FamilyBiz, which created a financial technology system that provides private users with advanced social financial tools. Their system automatically gathers all of the user’s financial data, including credit cards, bank accounts, investments, mortgages, real estate, and insurance and pension data. The FamilyBiz software allows users to run a current budget with a personalized comparative report system. Using special bots and algorithms, the system builds a business plan to help users realize their financial goals.

These are just some of the many Israeli FinTech companies listed in our Start-Up Nation Finder Business Discovery Platform. Interested in knowing more about Israeli startups working toward the UN Sustainable Development Goals? Contact us here for more information. In the meantime, keep your eyes on this space for further installments in our new blog series focused on Impact-Tech in Israel.

Nicole Krieger contributed to this post

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Meet the Israeli Tech That’s Tackling Climate Change https://startupnationcentral.org/blog/impact-tech/meet-the-israeli-tech-thats-tackling-climate-change/ Thu, 28 Oct 2021 08:33:12 +0000 https://startupnationcentral.org/all-posts/meet-the-israeli-tech-thats-tackling-climate-change/ From energy storage to carbon capture, more than 760 tech companies in Israel are developing solutions that address climate challenges More than 190 world leaders are convening in Glasgow, UK, to begin the 26th UN Climate Change Conference of the Parties (COP26), a two-week summit dedicated to taking action towards realizing the goals of the […]

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From energy storage to carbon capture, more than 760 tech companies in Israel are developing solutions that address climate challenges

More than 190 world leaders are convening in Glasgow, UK, to begin the 26th UN Climate Change Conference of the Parties (COP26), a two-week summit dedicated to taking action towards realizing the goals of the Paris ‎Agreement and combating global warming. As extreme weather events are increasing in frequency, and in the face of the recent ‘code red for humanity’ issued by the Intergovernmental Panel on Climate Change (IPCC), ‎climate change has gone from being a fringe issue to an urgent global priority. The Glasgow summit is expected to speed up government plans to mobilize finance for climate solutions as well as create momentum for additional net-zero carbon emission commitments by corporations across a variety of sectors. 

Decarbonize or Miss the Opportunity 

Transitioning the global economy to meet net-zero carbon emission targets requires virtually every industry vertical to change its ways – from the way we generate and consume electricity, manufacture products, grow food, get around, to the way we build, heat and cool our houses. For that reason, as Bill Gates said, “there is an enormous opportunity (and responsibility) in the hands of tech innovators.” 

While some solutions (such as renewable energies) already exist and need to be deployed faster and smarter, many more breakthroughs are needed, which presents compelling opportunities for investors and entrepreneurs. The increase in consumer demand for decarbonization on one end,  along with regulatory and reputational risks for non-compliant companies on the other end, has created a pinnacle moment. Add in the  expected government investment in climate solutions, and it becomes clear that the current atmosphere supports longer-term prospects for startup companies providing solutions in areas ranging from sustainable food production, afforestation, to recycling, energy efficiency, and smart mobility – just to name a few1.

Israeli Tech for the Climate Transition

Start-Up Nation Central has been working with Social Finance Israel to identify and map the ‎Israeli tech startups that are developing solutions to help meet the net-zero emissions targets, and to classify them according to climate challenges areas and the UN Sustainable Development Goals.

Our preliminary mapping screened 2,500 Israeli startups out of the 6,500 tech companies active in Israel and identified that over 760 of them are already developing solutions for addressing climate challenges. These findings are supported by the recent report issued by the Israel Innovation Authority and PLANETech which identified 637 Israeli startups and growth companies established after the year 2000 that are developing solutions to climate challenges. The following companies are some of those that we have identified as industry leaders, which are already gaining significant market traction in their space.

Agriculture & Food Security 

  • Groundwork BioAgMycorrhizal inoculants for crops 
  • Beehero Beehive monitoring solution 
  • TIPACompostable flexible packaging; increases shelf-life of produce & reduces waste

Built Environment: energy, transportation, construction, and water ‎infrastructure

Consumption and Production: clean manufacturing, new materials, circular ‎economy, and carbon capture

  • UBQ Materials Thermoplastic material from municipal waste (reduces waste)
  •  Kornit Digital – Sustainable Digital Printing for Apparel and Textiles
  • TripleW – Lactic acid from food waste (reduces waste)
  • Airovation – Air carbon capture (captures GHG emissions)

Biodiversity & Nature Preservation 

  • Albo – Measurement and monitoring of carbon sequestration in nature-based projects 
  • ECOncrete – Ecologically ‎active coastal infrastructures 
  • Tomorrow.io– Weather forecasting solutions 

The Climate Innovation Festival: Galvanizing the Israeli Tech Ecosystem to Tackle Climate Change

To channel Israel’s renowned entrepreneurial and innovative spirit into action, we are calling global players to join us for the Climate Innovation Festival set to take place in Israel in October 2022. 

The Festival is a global gathering of entrepreneurs, investors, corporations, researchers, scientists, policymakers, and industry experts fostering the next generation of climate-tech solutions to address the global climate crisis. The Festival consists of a  two-day innovation summit with multiple competitions, gala events, panels, and roundtable discussions with key global experts from governments, corporates, and innovators, with key ecosystem players from Israel, and guided site visits to leading tech companies in Israel and climate-related projects and prizes.

The Climate Festival will feature multiple competition tracks, which are specifically designed to accelerate climate-tech research, entrepreneurship, and market growth:

  • The Climate Solutions Prize – a one-million-dollar fund prize presented by the Jewish National Fund of Canada to incentivize and motivate the best and brightest not-for-profit researchers and organizations throughout Israel with funding to curb the climate crisis through innovative, high-impact, and executable ideas.
  • The Climate Solutions Competitions for Startups – a multi-track competition for Israeli startups, where each track is led by a different corporate partner or investor offering equity, POC/pilot opportunities or market growth assistance to the winning companies. 

The Festival is structured as a call for partnership with all ecosystem stakeholders. Join us together with our partners the Jewish National Fund of Canada, Keren Kayemeth LeIsrael Jewish National Fund (KKL-JNF), and the Peres Center for Peace and Innovation to incentivize and support breakthrough climate solutions. Contact Yael here for more information.

1Sustainable Investing Perspectives, UBS, 8 September 2021.

Daniela Kandel contributed to this report

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Finding Big Impact Investment Opportunities in One Small Country https://startupnationcentral.org/blog/impact-tech/finding-big-impact-investment-opportunities-in-one-small-country/ Thu, 14 Oct 2021 05:06:30 +0000 https://startupnationcentral.org/all-posts/finding-big-impact-investment-opportunities-in-one-small-country/ The Israeli tech ecosystem is the perfect breeding ground for impact-tech to develop and impact investment to thrive By Daniela Kandel and Yael Weisz Zilberman We live in two different worlds. The world we prefer to talk about is driven by a pace of innovation and development never before seen in human history – the […]

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The Israeli tech ecosystem is the perfect breeding ground for impact-tech to develop and impact investment to thrive

By Daniela Kandel and Yael Weisz Zilberman

We live in two different worlds. The world we prefer to talk about is driven by a pace of innovation and development never before seen in human history – the technological ecosystem, in particular, has always been at the forefront here, redefining how we live our lives day in and day out. This is a world that is witnessing a true revolution, in which rapid advances in technology and global connectivity elicit results that were previously undreamed of. 

Yet, we also live in a world full of poverty, deprivation, and inequality – not to mention the frequent environmental calamities. This is a world that needs our utmost attention, which is why the United Nations has brought this to the forefront of the global agenda by establishing the Sustainable Development Goals (SDGs). The SDGs are a collection of 17 interlinked global goals designed to be, as described by the UN itself, a “blueprint to achieve a better and more sustainable future for all.” Reaching these goals requires funding, which is a challenge as the Joint SDG Fund explains: “World leaders have made ambitious commitments to achieve the SDGs, yet securing enough resources remains a major challenge, with developing countries facing a gap estimated between US$2.5–3 trillion per year.” There are many financial tools being developed, both public and private, to close this gap, and one of these tools is impact investing – investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. This growing community of impact investors, with guidance from the United Nations, gives us hope that these two disparate worlds can become one.

Profitability for Global Good

In 2015, 192 United Nations member states came together to both define those aforementioned UN Sustainable Development Goals and commit themselves to addressing them in a collaborative effort. While this achievement indeed lays the groundwork for progress, the lion’s share of the task still lies ahead. The SDG targets for 2030 are still far from reach, and as data continues to emerge it has become abundantly clear that now is the time for swift and aggressive action.  

Private Sector and Capital Markets Shifting Towards Impact Investing

The private sector has recognized the opportunities for innovation and profit, as well as the need to mitigate the risk from new government policies and regulations, as well as customer preferences. Financial markets have begun to shift, and the data show that global impact investing has reached an estimated $715B,  with over 51% of this total representing for-profit asset managers (based on the GIINs most recent report). Growing numbers of businesses and investors are being drawn to the Principles for Responsible Investment (PRI) and are beginning to evaluate their portfolios based on social and environmental impact as well as the omnipresent profit motive. 

As recent trends expand and investors’ appetite grows for sustainability and impact investing, considerable resources are being allocated to address these challenges across all for-profit entities, as highlighted by some particularly relevant examples: the Blackrock Global Impact Fund, Temasek on Decarbonization, and TPG’s The Rise Fund with over $5B under management, 

In the corporate world we see similar trends, with initiatives such as Amazon’s Climate Pledge Fund of $2 billion, and Walmart’s recent launch of its first $2 Billion Green Bond, just to name a few.  

The Opportunity for Tech

Pitchbook’s recently released initial report on the activity of impact investing estimates that in 2020 there was about $286B in assets under management – with around $73B in dry powder and the remaining value of $213B. The quantity of funding allocated to impact Investing or ESG-aligned strategies highlights the growing demand for solutions at the later stages of the development pipeline. 

This presents a clear opportunity for VC players to either define themselves as impact investors or to align their work with the SDGs to appeal to a wider set of later-stage investors. The Pitchbook data show that since the year 2017, VC investing has seen a steady incremental increase of 12% in proportion to the total amount of impact capital raised. 

Dynamic Israeli Innovation is Ideal for Impact

Israel has a unique and crucial role to play in creating innovative solutions that can rapidly scale up to address these global SDGs. Israeli innovation traditionally leverages both technological expertise as well as a singularly dynamic business culture, entrepreneurial culture, rapid to adapt, and multidisciplinary. This is what allows companies in the “startup nation” to potentially be on the cutting edge of impact-tech. Entrepreneurs and investors alike understand the magnitude of these ever-growing challenges requires a dynamic pace and fearless ingenuity, yet they lack the understanding of just how much Israel has to offer in this space. 

Looking more closely at Pitchbook’s data, the resources allocated by impact investors globally relative to the various SDG categories, we observe a noticeable trend toward sectors that are already among the most flourishing in the Israeli landscape: 

  • Health (16% of overall raised by impact funds since 2017) – 1608 Life Science and HealthTech innovation companies in Israel
  • Energy (30%) – 225 Energy technology innovation companies in Israel
  • Financial Services (14%) – 501 FinTech innovation companies in Israel
  • Education (7%) – 293 EdTech innovation companies in Israel
  • Agriculture (7%) – 455 AgriFood-Tech innovation companies in Israel
  • Water (6%) – 180 Water technology innovation companies in Israel

Not unlike earlier points in history, Israel once again finds itself at the beating heart of a global crossroads, and there cannot be a better set of circumstances for the Israeli ecosystem to assert itself as the world’s leader in innovation for impact. Impact investors are naturally attracted to the intense speed and high levels of creativity and precision inherent in the Israeli tech culture. These are exactly the advantages that enable Israeli startups to develop innovative solutions to complex challenges – such as those contained in the SDGs. 

All of this makes the Israeli tech ecosystem the perfect breeding ground for impact-tech to develop and impact investment to thrive. As more investors are exposed to its immense potential, this tidal wave of interest in Israeli impact-oriented startups will only grow larger.  

It is for this reason that Start-Up Nation Central is assisting global players to leverage state-of-the-art Israeli innovation to tackle social and environmental challenges. We do this by mapping all elements of the ecosystem and generating insights, as well as cultivating partnerships with corporations, investors, accelerators, and leading NGOs to implement and scale Israeli solutions on the ground. 

Interested in knowing more about Israeli startups working toward the UN Sustainable Development Goals? Keep your eyes on this space for further installments in our new blog series focused on Impact-Tech in Israel. If you are working in this field, contact us here for more information about how Start-Up Nation Central can assist you.

Yael Weisz Zilberman is Start-Up Nation Central’s Partnerships Manager – Sustainability & Impact.

Daniela Kandel is the Senior Advisor for Sustainability and Impact for Start-Up Nation Central.

The post Finding Big Impact Investment Opportunities in One Small Country appeared first on Startup Nation Central.

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