By now, nearly everyone has been exposed to the Internet of Things (IoT) in
one way or another, whether through a Fitbit bracelet, a Nest smart
thermostat, or now even the Apple watch. But despite all of the hype, IoT
is still something of an enigma, both to laymen and investors alike, and
from Silicon Valley all the way to Tel Aviv. Moreover, for a number of
reasons including a history of Israeli failures in the consumer and
hardware spaces, there is a general lack of belief that Israel can be a
leader in IoT.
However, at Innovation Endeavors in recent months, we have seen a growing
amount of impressive IoT activity coming out of Israel. This intrigued us
and led us to do a three-month deep dive into the space. The goal was to
both demystify the existing understanding of IoT and identify the trends,
sectors, and technologies that can serve as significant opportunities for
Israeli entrepreneurs in this space.
Sourced through Scoop.it from: www.innovationendeavors.com
Key findings of the landscape
1) IoT is booming with activity in Israel. According to the landscape research, there are around 330 Israeli IoT companies. As Israel is home to approximately 6,100 active startups in total, IoT represents a surprisingly whopping 5% of the Israeli startup ecosystem! These companies pertain to all verticals, stages, and levels of the stack, and address unique problems across many major markets.
2) Israeli IoT leverages Israel’s strengths in sectors like healthcare, life science, and cyber security. Given Israel’s historical proficiencies, it is not surprising that most of the IoT activity in Israel plays to the country’s unique strengths in areas such as healthcare, science, and cyber security, in new and interesting ways. For example, one Israeli company in the cyber security vertical is Argus Security, which is building a “firewall” for the connected car, defending your vehicle from being compromised by outside attackers, especially hackers that can take control of your car remotely! If, on the other hand, you’re less worried about hackers and more worried about calories, Consumer Physics’ molecular pocket sensor allows you to measure the physical world around you, including food, medicine, plants, and more. For instance, you can scan a piece of cheese and find out complete nutritional information like calories, protein, fat, etc.
3) The Israeli IoT industry is still far from mature. Regardless of sector, most companies on the landscape are stuck in the middle stages of their lifecycle, i.e. the R&D or initial revenues stages. Moreover, nearly 80% of companies are focused around the applications category rather than other levels of the stack (such as IoT platforms or components). This unbalanced distribution in terms of stage and level suggests a severe lack of infrastructure and maturity in this market wherein startups have not yet found their long-term product-market fit or verticalized their supply. However, this also represents an opportunity for companies to capitalize on such “whitespaces” in the landscape, particularly around the platform level where the numbers indicate that it is still early in the lifecycle curve.