You are here

Israeli tech's Singapore connection

Why Singapore banks and businesses are tying up with AI startups

SINGAPORE may be emerging as a springboard for Israeli firms with a focus on artificial intelligence (AI) that are looking to tap Asia's rise in wealth and stature.

Take one of Israel's venture funding outfits, OurCrowd, which set up its first Asian office in Singapore in 2016. Since then, it has been hosting clients out of Asia - including from South-east Asia, Greater China, and Japan - at a steady clip, and plans to add more offices in Asia soon. This is relevant as according to Israeli data firm, OurCrowd is the most active investor in AI startups in Israel, with some 26 investments in total. 

Denes Ban, managing director of Asia at Israel's equity venture crowdfunding platform OurCrowd, tells BT at the sidelines of OurCrowd's annual summit in Jerusalem in March that Asian investors are expected to make up the bulk of the platform's investor base in time.

As it is, flows from Asia have in the last couple of years made up more than half of the funding recently invested on their site. OurCrowd plans to raise between US$30 million and US$50 million with an Asian partner for its first Asia fund in the next 18 months. This Asia fund will draw funds from investors in Asia, and offer access to international tech companies, including those from Israel and Asia.

Market voices on:

Partnering with banks offers Israeli startups a way in to tap Asia's burgeoning wealth. And this comes as Israel's AI startup ecosystem is blossoming, with more than 950 active startups using or developing AI technologies as at Aug 30, 2018, data from Israeli tech data firm showed.

Over the last five years, an average of 140 startups are established annually. AI startups raised close to US$2 billion in funds in 2017, up 70 per cent from 2016.

OurCrowd founder and CEO Jon Medved told media at its summit that Israel and China today are among the top global locations building out AI. And AI is rapidly emerging as an essential sector, both in terms of today's business needs and where investors want to bank their money. "If you want to get venture capital, mention AI. In fact, if you don't have AI as part of your pitch, you're sort of in trouble," he had said.

While not directly comparative, a Tsinghua University report as cited by South China Morning Post showed that China's AI market was worth some US$3.55 billion in 2017, in itself up 67 per cent from the year before.

Against this backdrop, banks in Singapore are keen to work with Israel firms, tapping their expertise in screening and developing technology offerings. OurCrowd meanwhile has worked its way through Asia by partnering a local bank in each Asian country, with UOB as its Singapore choice in 2016.

The benefits work in two ways: banks are keen to work with Israeli firms directly to raise their game by using data, fending off competition from Big Tech. Banks here can also tie up with players such as OurCrowd to help its Asian business clients source for new ideas in restructuring their traditional businesses for Industry 4.0, as well as invest in tech outfits that may take off in this new data economy.