Italy is a nation of iconic, world-beating industry, from food and fashion to cars and household appliances. But despite its size – Italy is the third largest economy in the eurozone, and the eighth largest nominal GDP on earth – the Apennine Peninsula has failed to build a technology sector on par with its European neighbors.
Enter Israel. The Startup Nation may be the world’s most over-performing tech territory, with thousands of companies and over $5 billion raised in 2017 (the previous year firms based in Italy, whose population exceeds that of Israel by seven times, raised just $113m). Little wonder Italians are increasingly keen to upgrade their iconic industries with Israeli tech flair.
At the forefront of this cooperation is OurCrowd, the Jerusalem-based crowd equity platform, whose stable has included headline-grabbing brands like Insightec, Maniv Mobility, mPrest and dozens of others at the vanguard of Israel’s deep tech revolution.
Last week OurCrowd signed a memorandum of understanding with Intesa Sanpaolo, Italy’s largest bank and gatekeeper to many of Italy’s biggest OEMs (original equipment manufacturers). Intesa gains access to OurCrowd’s tech and investors, while OurCrowd makes inroads into a nation with huge, untapped tech potential.
Imagine Ferraris powered by Israeli AI, or Gucci supercharged by top-line 3D printing technology. “Innovation comes in terms of creativity or style: you see it in food, you see it in fashion,” OurCrowd senior vice president of global operations Josh Wolff tells Red Herring. “There is so much that Israel can learn from the success of certain Italian sectors, and more importantly what you’re seeing now is that all of these different sectors are no longer silos; they start to merge together.
“Whereas once upon a time drone was a drone, we now have technology companies in our portfolio that are DroneTech,” Wolff adds. “They apply to dozens of different industries and they’re being adapted.”
Of particular interest is the mobility market, and how it can prepare Italy’s automakers for the next generation of connected, smart vehicles. Last week hundreds of companies attended EcoMotion, a mobility conference in Tel Aviv – and Intesa Sanpaolo had one of the show’s biggest stalls.
“The first thing you notice when you come here in Israel is the atmosphere,” says Manuela Moroni of Agrati Group. “It’s a very young country, with a very special group. We Italians are creative and artistic, but we miss this spirit of innovation – and Israel could be an inspiration to us.”
Italy’s auto sector is “the kind of big, slow moving industry…that could really do with a bit of a shakeup, maybe from Israel startups,” adds Wolff.
The Italian automotive industry is the fourth largest in Europe, behind Germany, the United Kingdom and France. It sold 1.82m new vehicles in 2016, representing a 15.8% growth on the previous year. Its total value is $96.2bn. The country’s clothing industry is worth over $42bn, while food exports totaled just under $35bn. The vast majority of Italy’s economy is built on SMEs. Tech innovation could have near-instant results.
Israel Italy Tech Challenge already offers Italian tech talent the chance to learn from Israel’s deep tech community, including the IDF’s renowned 8200 Unit, from which dozens of top-end startups have spun. Enel, an Italian energy provider, has an innovation hub in Tel Aviv.
Intesa, which with an $8.5bn revenue and over 96,000 staff members is Italy’s largest fully private employer, already runs an Innovation Center. But its head of network and promotion of innovation culture, Fabio Spagnuolo, sees unique value in Israel. “(Equity crowdfunding) is a world that’s very new to Italy,” he says. “It’s not something anyone does really. The quality of the startups…this is something very, very special.”
OurCrowd’s international presence has skyrocketed in recent years. It now has ten offices on four continents, and 25,000 investors based in 112 countries. A recent drive to partner with financial institutions has seen deals with National Australia Bank, Hong Kong’s CITIC Pacific, United Overseas Bank in Southeast Asia and India’s Reliance Private Client, among others. Italy is just one part of the company’s rapid global scaling plan. But it is a huge one – and a country that has been, until recently, surprisingly overlooked by tech’s big players.
“We’re seeing stuff that’s converting into real life solution in two-and-a-half years,” says Wolff. “And part of that is because of connectivity between not only developing the technology, but the fact that these technologies are enhancing one another to create real solutions quickly.
“It means that everybody’s got to be absolutely on the ball here, and everybody’s got to be proactive.”