NZ struggling to commercialise good innovation, Israeli entrepreneur says
New Zealanders have great ideas but the commercialisation of them was “near zero”, says Israeli entrepreneur Isaac Bentwich, whose latest venture, CropX, is based on technology from Landcare Research.
“It reminded me of where Israel was 30 years ago,” he said.
Bentwich is the founder and chief executive of CropX, an agritech company formerly known as Verigate, which licensed research from the New Zealand crown research institute. Its first funding round was with New Zealand angel investors including the NZ Venture Investment Fund and last year it raised US$9 million in a series A funding round and then a further US$1 million last month.
Investors include Google chairman Eric Schmidt’s venture firm Innovation Endeavours and US-based Finistere Partners which includes Kiwi Arama Kukatai as a partner.
CropX aims to help farmers produce more food with less water and other resources. It makes soil sensors and irrigation controllers for use on commercial farms and an app to help farmers interpret the data they gather.
Bentwich says more global entrepreneurs need to be attracted to the country to help build the innovation eco-system.
Bentwich is a medical doctor by training and serial entrepreneur whose efforts with his previous three companies led to a Nasdaq initial public offering and two acquisitions worth about US$50 million. He discovered the CropX technology while living in Nelson a few years ago and has since migrated the company to Tel Aviv.
“It’s really a co-production of New Zealand technology, Israeli technology, and the US market,” he said.
Speaking to the first ever New Zealand innovation mission to Israel, Bentwich said when he was in New Zealand he was blown away by two things – the quality and quantity of innovation.
Israel is known as the start-up nation with more start-ups per capita than any other country and the second highest level of investment per capita in start-ups behind the US.
Bentwich was initially refused residency in New Zealand because he didn’t meet the immigration criteria and only got approval through special intervention by senior officials.
“You had to have a Ph.D. in biochemistry or biotech. I only employed hundreds of people with these PhDs but that didn’t matter,” he said.
Bentwich said his advice to government officials during his two and a half years in New Zealand was that local entrepreneurs needed access to global serial entrepreneurs who could help them learn the necessary skills to build a successful business.
“Training the local ones is key and then the money will follow. The capital which is critical to a company is secondary to the entrepreneurs,” he said.
With his first company, Bentwich got overseas funding from US venture capitalists in Silicon Valley – their first investment in Israel – and they helped him learn the ropes.
New Zealand’s government recently introduced a new Global Impact Visa aimed at attracting global entrepreneurs to live and start-up businesses in New Zealand. The tender process for a private sector partner to run the four-year pilot programme goes out next month.
Bentwich said there’s a lot of potential alignment between New Zealand and Israel which were both islands with small populations far away from their markets that had to rely on their resourcefulness. “New Zealand is in a sea of water and Israel in a sea of hostility”, he said.
He’s a fan of the two countries setting up joint funding initiatives to commercialise technology, which would “bring together the mellow Kiwi nature with the caffeinated Israeli one and great things will happen”.
In the early days of Israel’s technology boom there was a similar phobia still apparent in New Zealand of losing talent and innovation when companies were bought by foreign interests, he said. Israel had got over that concern now.
“Having entrepreneurs set up shop in the main markets is a good thing and if they live there and leave New Zealand that’s okay, they will come back and when they do they bring ties with them and that is where the great potency is,” he said.
(Disclosure: Fiona Rotherham travelled to Israel with support from the Trans-Tasman Business Circle.)
BusinessDesk receives funding to help cover the commercialisation of innovation from Callaghan Innovation.