At KARAT, the technology incubator of the Israel Electric Corporation (IEC), technological innovations are hand picked, in hope of introducing the world to smart energy solutions, quickly. The incubator may still be in its infancy, yet its portfolio companies have already raised more than $10 million in capital.
Up until now, Israel’s creative innovators have relied on the technological venture incubators set up by the Ministry of Industry, Trade and Labor in order in order to blossom. Now the Israeli Electric Company (IEC) has decided to adopt the Ministry’s model, and to provide a home for innovative technologies which will enable the IEC to be active in new business arenas, marketing innovative technologies.
The overall vision behind KARAT (in Hebrew, an acronym for “Accelerating Technological Ideas”) is to “advance innovative ideas in energy-related fields: environmentally friendly technologies, energy efficiency, smart grid and additional ideas related to performance improvements in power plants”, according to Dr. Adrian Biano, IEC’s VP of Strategic Resources, who founded the unit and manages it.
The KARAT Screening Process
According to the IEC, their specialists evaluate the ideas received, which then go through a stringent screening process, with a limited selection sent on to IEC’s investment committee. Only the ideas deemed the best and most feasible are then entered into the collaborative working agreement stage.
“Out of around 500 ideas that were received through the website, 30 have reached an advanced screening stage, and today 10 companies are listed as KARAT portfolio companies, with 5 at pre-agreement stage” says Dr, Biano, who also points out that KARAT makes every effort to minimize the bureaucracy surrounding a company’s acceptance.
The IEC provides business ventures with a loan of up to NIS 2 million (about half a million dollars) – funding intended mainly for prototype design and development – which can later be converted into company shares. The IEC also cooperates with the government, and thus some of the ventures are able to receive funding from the Ministry of Industry, Trade and Labor’s Chief Scientist, or from the Ministry of Energy and Water Resources’ Heznek Foundation.
Israel NewTech is also active in encouraging implementation of innovative energy technologies in the local market, with the understanding that successful local implementations are key to international business. Indeed Israel NewTech, together with other government branches, has created an NIS 40 million (over $10 million) fund for local pilot implementations dedicated to reducing carbon emissions.
KARAT helps ventures consolidate and manage their business plans, and find additional investors. New start-ups also have access to laboratories and facilities in order to conduct any necessary product experiments. Additionally, a team of specialists are available to check the ongoing feasibility of the ideas, and provide further marketing support down the line.
According to Dr. Biano, the areas in which KARAT has chosen to focus are “the most promising in terms of technological innovation and money invested – for example in regard to smart grid technology, the Obama administration is investing millions of dollars, and the same goes for France, Germany and a variety of other countries. This is also the case in energy efficiency, and we’re convinced that Israeli creativity can contribute in these arenas”.
Innovations in energy-related fields often require a great deal of investment, because projects usually take a long time to complete. KARAT however, prefers to focus on ideas whereby the technological development time- from innovation to realization – is relatively short, taking no more than 2-3 years to create a prototype.
KARAT Figures Strong
The KARAT incubator may still be in its infancy, but it is already boasting some impressive figures. In addition to the loans it provides to ventures, its portfolio companies have managed to raise more than $10 million in external capital overall. They’ve managed this with the help of local venture capital funds, private investors and government funding.
KARAT is also active in seeking foreign investments for their companies, since the new technologies are designed to increase the efficiency of large energy providers around the world.
During the course of 2012, KARAT plans on inducting 6 more business ventures, bringing the total number to 16 portfolio companies. The unit also plans to raise funds for existing companies and begin initial product marketing in Israel and abroad.
KARAT – Company Information
Status: Internal venture unit at the IEC
Year of Establishment: 2010
Director: Dr. Adrian Biano, VP of Strategic Resources at IEC
Areas of Activity: Nurturing smart grid technology companies, energy efficiency, reducing toxic air emissions from power plants and improving grid performance and reliability at power plants.
Portfolio: 10 enlisted companies, and an additional 5 in advanced negotiation stages.
Available funding for each company: NIS 2 million from IEC’s budget, which can later be converted into company shares.
KARAT Portfolio Companies
1. Burning Solar Ltd. uses the element of carbon for the production of an advanced multi-junction PV to electric conversion.
CEO: Dr. Moshe Maharizi
2. PV Nano Cell is involved in disruptive technology which achieves a significant cost reduction in the manufacturing process of silicon solar cells, through an inkjet printing process based on nanometric materials.
CEO: Dr. Fernando De La Vega
3. InnoSave Ltd. has introduced an energy saving drive for electrical industrial motors
4. Metrycom Communications deals in maintenance-free sensor units, designed to predict failures in the transmission and distribution systems.
CEO: Liroln Frenkel
5. 3GSolar Ltd. utilizes highly-efficient, low-cost Dye Solar Cells with a focus on the global PV market. This provides a superior alternative to traditional photovoltaic (PV) modules, such as Thin Film and Crystalline Silicon.
CEO: Berry N. Breen
6. BirdsVision Ltd. provides solutions for the detection, identification and automatic deterrence of animal hazards (mainly birds) for the energy industry.
CEO: Ofer Bahat
7. BrightLED Ltd. offers LED street lighting solution which solves heat dispersion, thereby greatly improving energy use and decreasing electricity consumption.
CEO: Rami Mirski
8. Panoramic Power Ltd. provides a low cost, smart grid solution for the precise monitoring of electrical consumption at the individual circuit-level.
CEO: David Almagor
9. Powercom Ltd. offers Smart Grid Solutions based on Smart Metering Technology, adapted to US standards.
CEO: Yackov Dar
10. Even-Or Technologies Ltd. (company is in reorganization stage) utilizes photovoltaic solar cells based on amorphous materials.
Companies in beginning stages:
11. Magic Optic Lighting Ltd. develops streetlight luminaries based on novel light guide technology to concentrate LED illumination.
CEO: Israel Shotland
• 4 more projects will be added before the end of May 2012, but due to confidentiality issues, they cannot at present be named.