Arieli Capital is teaming with the Ramat Hanegev Regional Council to develop new ideas for desert farming.
The Ramat Hanegev Regional Council has announced that it will set up an ag-tech innovation center, which will operate in coordination with the existing Ramat Hanegev R&D desert agricultural center near Ashalim. Ramat Hanegev is the largest regional council in Israel, covering over 1 million acres (22% of the area of the State of Israel), with annual agricultural production of NIS 750 million.Ramat Hanegev R&D is one of six regional R&D centers that since the 70’s has been involved in research in advancing regional agriculture. The research is not theoretical or academic but rather results are immediately passed on to farmers. For example, as a result of the lack of water in the desert, farmers in the region can know the ideal combination of fresh and brackish water for their crops.
Arieli Capital is the leading force behind the establishment of the new center and is cooperating with the regional council and other investors. $5 million will be invested in the project. The center will focus on areas of expertise of the region including agriculture, desert agriculture, marine agriculture, and medical cannabis. According to Arieli Capital’s own definition, “we invest in innovation platforms, hubs, accelerators, academic technology transfer companies, and our investment arm is backed by leading American family offices.”
Setting up the innovation center will be planned and led by the Eilat Tech Center (ETC), founded and operated by Arieli Capital in Eilat. ETC is Arieli’s executive arm in Israel, operating the Eilat Hub in partnership with the Eilat Municipality and other bodies to develop a tech ecosystem in the city. ETC also operates an accelerator in Eilat along with Maof Tech, a body that is operated by the Ministry of Economy through the Small and Medium Business Agency for advancing tech entrepreneurship culture in national priority regions.
Initially an ag-tech accelerator will be established in Ramat Hanegev with five to ten startups. Access to assets worth tens of millions of shekels will be offered to the entrepreneurs along with support and counseling from technology and business experts from the agricultural and food industries, access to the Ramat Hanegev R&D Center, as well to leading agricultural and food companies, participation in the business development and fund raising for investment, and the opportunity to conduct technology trials in the fields within the regional council.
Ramat Hanegev Industries deputy director of economic development Itzik Tzur said “This is a necessity in a reality where the scale of financial support is continuously declining. The idea is to take the knowhow that has accumulated and the experience in applied agricultural research and offer it to the innovation center. The vision is that successful projects will emerge from the center and that the Arieli Ramat Negev center will grow the next Waze and Mobileye of the agritech world”.
Founding the incubator is a move that fits interesting trends taking place in the domestic and global tech market, such as a migration away expensive city centers, and the emphasis on “Industry 4.0”, a term that describes the process where tech meets traditional technology, for example in agriculture and industry. These sectors are enhancing and improving production line efficiency and yields by monitoring, sophisticated sensors and producing insights with AI tools.
In the past two years interest in agritech has been increasing, and the coronavirus crisis has contributed to this trend by accentuating the limitations of existing supply chains and the mounting challenges of the need to feed the billions crowding the world’s cities. A consensus is emerging that high tech will play a key role in achieving these goals.
The Israel Innovation Authority, which operates within the framework of the Ministry of Economy and Industry, is also advancing these ideas. The announcement of the establishment of an innovation center in Ramat Hanegev comes five months after the authority itself announced its intention to invest around NIS 80 million in outlying regions in the fields of medical cannabis, cleantech, agritech, Industry 4.0, and plastics. These incubators are to be located in Yerucham, Karmiel, and the Bnei Shimon Regional Council. ETC did not participate in the tender but intends to do so in the Innovation Authority’s next tender.
Previously companies that grew out of Israel Innovation Authority tech incubators in outlying regions did not remain there. Therefore, the authority is now taking steps so that the new incubators will operate close to relevant activity and assets such as factories, local ecosystems, academic institutions, and local entrepreneurs. This is also how the Ramat Hanegev innovation incubator will operate alongside an active industrial body and in the framework of an R&D institution that was established by the regional council in 1981, and that has overseen groundbreaking agricultural developments.
Or Haviv, partner and head of innovation at Arieli Capital, explained what makes the Ramat Hanegev center so unique. “It is one of the most experienced bodies of its kind in Israel, surely in agritech, but it does not have a real ecosystem connected to it, and a plan to grow agritech companies. This will enable them for the first time to emerge in an organized fashion and to set up a significant platform to which they can bring all of their assets.” “>פHaviv points out that it is not just research and points to Ramat Hanegev’s global commercial network bringing in around NIS 750 million in sales annually. “One has to see the center not just as a development center, but as an industrial body that works directly with food and agricultural organizations in Asia, China, the US and Europe. The aim is that with the use of the technologies that are developed at the center, they will be able to take advantage of their existing assets. These assets are currently realized only through regular commercial trade and not in the world of new commercial opportunities. The incubator will offer startups access to labs, agricultural areas and agricultural equipment along with the overseeing of the commercialization process.”
Haviv mentioned that the Ramat Hanegev platform is looking for Series A stage startups, “just before entry to the market, with a team, with IP, an initial investment, a prototype of their product that they can test with clients to run a pilot on. For participation in the commercial center, it will request a stake of around 10% of the company.”
Ramat Hanegev Regional Council head Eran Doron, advanced the project from the local side. Doron was previously active in renewable energy and managed the tender for the Ashalim solar power plant, in the regional council, one of the largest projects of its kind in Israel.
Doron told “Globes” that he was initially skeptical about the Ramat Hanegev innovation center. “It took time for me to find the right connection, since the economic potential of incubators is not always significant. After we brought crops to the desert that had never been here before, and these crops became the most effective with the highest yields in the world, and we even succeeded in being the first to domesticate truffles in the desert. We now want to progress even further by connecting high-tech with all the know-how we have gained in the past 50 years.”
Published by Globes, Israel business news – en.globes.co.il – on May 25, 2020
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