Jon Medved, CEO of equity crowdfund OurCrowd, is one of Israel’s leading AI investors. But, the enigmatic, Hawaiian shirt-loving VC says, deep tech brings its own deep and unique issues for entrepreneurs. Unlike many other tech fields, building a successful AI platform is oftentimes not a sprint, but a marathon.
Few know Israel’s tech scene quite like Jon Medved – and few proselytize it as loudly. The 63-year-old serial entrepreneur, chief of Jerusalem-based equity crowdfund OurCrowd, has become such a prominent voice in the nation that, since 1980, he’s called home, that the Jerusalem Post recently called Medved “the startup nation’s guru.” After almost four decades of IPOs, funds and, at OurCrowd, over 170 investments, it seems a pretty safe call.
Unsurprisingly perhaps, Medved recently admitted he was “addicted to deals.” Lucky, then, that with 2013-founded OurCrowd Medved has helped close dozens of funding rounds and some of Israel’s most striking recent exits, including those of BriefCam, Jump and Invertex. Today the firm, which allows cash injections at a minimum $10,000, has eleven branches on four continents, and almost 30,000 investors from 150 countries.
OurCrowd welcomes thousands of tech insiders to Jerusalem annually for its Global Investor Summit. At last year’s edition in March there was one phrase that unmistakably stole the show: AI. “If you want to get a venture capitalist to start drooling, mention AI,” he told a crowd at the show, dressed in his signature open-shirt and suit (Medved often prefers to wear Hawaiian shirts, a nod to his West Coast upbringing). “In fact, if you don’t have AI as part of your pitch, you’re sort of in trouble.”
Medved knows a pitch better than most. Born in San Diego and raised in Los Angeles, Medved’s parents left the US for a short time to live on a kibbutz near Israel’s northern border with Lebanon. As a young man Medved showed little interest in venture capital, and studied history at UC Berkeley. Having protested the Vietnam War, Medved visited Jerusalem in 1973, developed a passion for Israel and toured American universities countering protests against the Yom Kippur War.
In 1980 Medved made Jerusalem his permanent home. In 1995 he founded Israel Seed Partners out of his garage. It became one of the most influential VCs in the country. In 2006 Medved founded IP tech firm Vringo, which gained notoriety for a grueling courtroom battle with Google. It went public in 2007. Six years later Medved built OurCrowd with a view to get more people into tech investment. To date it has raised almost a billion dollars.
Medved has long prided himself on seeing ahead of the tech curve. AI is his latest passion. OurCrowd has been busier than most in the space, building an empire of companies working in fields like adtech, medtech, security and mobility. “The days of AI handwaving and simply a proof of concept “wow” testing are already gone,” he tells Red Herring. “It is now about turning AI into real business. And that requires a series of skills and capabilities that go beyond algorithmic brilliance.”
The most famous of Israel’s AI-based exports is Mobileye, an autonomous driving and driver assistance platform, founded by university professor Amnon Shashua in 1999. In March 2017 Intel bought Mobileye for $15.3 billion, making it the largest-ever acquisition of an Israeli company. But behind Mobileye there is a bubbling Israeli AI industry that punches far, far above its weight. In February Forbes reported that Israeli is home to 363 AI startups, third behind the United States (1,393) and China (382), the latter of whose population is 159 times the size of Israel’s.
“The fact that Israel is almost neck and neck with China in terms of an absolute number of AI startups is truly remarkable,” says Medved. “Companies here are very nimble, have tremendous algorithmic expertise, but also have access to interesting data sets that, despite Israel’s small size, have real value, such as the digital health data Israel has been collecting for the last 20 years.”
When it comes to the biggest pitfalls facing AI startups, Medved is clear: it’s the data, stupid. “Innovative machine learning technology is important, but data trumps all of that,” he says. “Many startups come with a very good idea of how to analyze the data, but lack the data resources or have not collected the proper data sets in order to make their solution work.”
Medved points to a handful of OurCrowd’s stable companies as examples of how to tackle data sets. Taranis, an aerial surveillance agtech firm, uses airborne optical pods to collect information. ClimaCell pores existing IoT infrastructure to gather up-to-date and accurate weather data. “Today the market is seeking more than just algorithms from AI startups,” he says, “and startups have to come with complete solutions that have the right use case and product market fit, to provide a a real demonstrable use case for customers.”
More recently, OurCrowd has been investing in medical tech startups that use AI to tackle big human issues. Zebra Medical Vision, for example, combines a proprietary data set of radiological images with a “broad and deep algorithmic portfolio combined with real-world interaction in the clinical environment,” says Medved. This, he adds, allows it to provide a real solution to a real problem – not simply to rehash a regular solution with the AI buzzword. This month OurCrowd launched a $50m medtech fund, much of which is focused on AI-based solutions in the medical landscape.
“Focus on AI investment should now be moving to vertical applications such as digital health, financial, security, agriculture technology or educational technology,” says Medved. “In these areas, AI can play a real role but the algorithms need to be part of a full solution set for these companies that we’ve invested in in these areas.” Medved also advises AI startups to partner strategically with large multinationals and key players who have access to customers and data sets. He also tells entrepreneurs “to raise a large war chest and as much capital as you can at this stage because the race for AI dominance is going to be a long one.
“It is not a sprint, but a marathon.”
It is a race OurCrowd, and Medved, have paced themselves perfectly to succeed. That’s not to say the tech leader’s family have followed him into the VC industry. Daughter Nina is half of the popular music duo Yonina, while sons Moshe, Yossi and Itamar have pursued careers in law, film and biomedicine, respectively. His wife Jane is a published poet.
Medved himself has never left the passion for history and justice that drove him to Israel over four decades ago – his brother Micheal remains an influential writer and broadcaster in the US. Jon prefers to use his voice to champion Israel’s tech scene – something he views not just as a business calling, but a national one. Little wonder he’s become one of the so-called “Startup Nation’s” biggest cheerleaders in modern times.