To Infinity and Beyond: Israel’s Leading Space Technology Venture Capitalist

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An image of the Earth and the Israeli Beresheet spacecraft en route to the Moon. Photo: screenshot.

CTech – Israeli venture capital groups are mushrooming in a wide range of areas. Yet an Israeli VC aims to invest where few have ventured before: space. TYPE5, founded by experts in the high-tech and deep-tech sectors, works with financial institutions and keeps an eye out for innovative technologies whose destination is space.

“We look at businesses from a different perspective than typical VCs. We don’t just look at aerospace as an independent sector, we look at the sub-sectors it impacts, such as medicine or cloud computing that have dual-use capabilities, ”said the co-founder and TYPE5 partner, Lior Herman in an interview with CTech.

“We aim to build an ecosystem of space technologies. Over the next decade, we believe that large companies like Amazon, Microsoft and Google will embark on aerospace strategies, technologies and applications, and that the markets of Silicon Valley and Israel will merge to support this ecosystem ” , did he declare.

In addition to satellite offerings, technologies designed for space could involve extending human longevity, telecommunications or cybersecurity offerings, energy conservation technologies, transportation or even medical fields.

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September 27, 2021 1:35 P.M.

“Over the years, we have felt that innovation and developments in the cloud and cybersecurity industries are reaching a glass ceiling, and that’s when we started to look into the quantum computing and how to bring like-minded startups to market, ”Herman said. Such technologies, often referred to as deep tech, are very complex to understand and require substantial funding and a long-term investment commitment from start to finish.

TYPE5 is based in Zurich, Switzerland, and has offices in Tel Aviv. Currently, its seven-member team is dotted with experts from a variety of fields, including investment management, software, legal and military expertise, and even a former Kahn Foundation CEO Einat Berkovich, who oversaw the collection. funds for Israel’s first lunar mission via SpaceIL. .

Jump into the next frontier

If he dares to go in this direction, the market is promising. According to a Bank of America estimate, space will become a dominant economy over the next 20 to 30 years, growing from a $ 424 billion industry to nearly $ 1 billion to $ 3 trillion. Over the past decade, government regulations have diminished, which in the past has prevented these types of businesses from moving forward.

“We’re jumping into the next frontier,” Herman said. “Space has been under embargo for about 75 years,” he added, noting that governments imposed security regulations to protect intelligence and surveillance issues, but once the US government removed them regulations, other countries have started to capitalize on the space as a sustainable self-economy.

An example of this plan in action is the Artemis Accords, a political commitment between governments participating in NASA’s Artemis program (a US-led effort to return humans to the moon by 2024), which propelled these winds of change. For the first time in human history, the agreements support both an economic and national coalition to help boost the space economy over the next 20 years, where the market valuation is expected to reach $ 50 trillion. dollars, Herman noted. This will allow emerging companies, such as SpaceX, Virgin Galactic, and others, to become space age pioneers.

Recalling mega-billionaires Jeff Bezos and Richard Branson, who recently embarked on short-term spaceflight after years of building their businesses, Herman put a different spin on the heavily criticized numbers: “It’s not just typical arrogant billionaires. They are laying the tracks that will help us prosper and become a self-sustaining economy.

In line with the wave of NewSpace technologies, commercializing space can help reduce the cost of launches, transportation and other innovative offerings.

From SpaceIL to Israel’s first space VC

Partner and co-founder Einat Berkovich’s journey into space sector investments began nearly a decade ago, when she led the initial fundraising for SpaceIL’s first Beresheet spacecraft as CEO of the Kahn Foundation.

“I came across the mission when it was just a pipe dream scrawled on a napkin. I didn’t know much about the industry, ”she said,“ but I knew it had to be a national project and I presented SpaceIL’s vision to the Kahn Foundation. We gave the startup its first $ 100,000, and that was the first step in making the mission a reality. “

SpaceIL then decided to collaborate with Israel Aerospace Industries on the project and focused less on winning the GoogleX Lunar Prize and more on carrying out the plan. “And we did,” she said. Today, as SpaceIL builds its next spacecraft and many other Israeli space technology startups emerge, it has become very natural to want to be part of a bigger vision, she added.

Create income from the cosmos

Currently, TYPE5 is interested in several vertical sectors that can be applied to the aerospace industry such as medical devices or autonomous robots. While the company has no portfolio companies to disclose, it does have its eye on several potential revenue generators. “We aim to invest in mature companies and know their technologies add value,” Herman explained. While it primarily focuses on Israeli startups, it also examines other global offerings.

Creating income from the cosmos is not just far-fetched hyperbole. A startup, Red Seas, is developing a system that creates synthetic blood cells, which is crucial for space because the bone marrow can be damaged by exposure to radiation. Performing blood transfusions in space – where donors and humans are scarce – is nearly impossible, so having the synthetic ability to prolong a person’s life holds great potential. Another company, Realview, creates holographic imaging that supports remote surgeries. “We believe that in the future – both in space and on Earth – medical centers will become 70% remote and 30% in person,” Herman said, adding that he believed medical companies were turning their attention. towards remote technologies.

Aging and longevity is another area that TYPE5 focuses on. “Aging is pretty much inevitable, but today several researchers are trying to intervene directly against the characteristics of aging and prevent age-related diseases,” Berkovich explained. “This possibility may exist because space flight has complex effects on physiological effects on organisms, which we do not yet fully understand.”

In a surprising example, NASA astronaut Scott Kelly, who currently holds the record for the longest time ever spent in space, saw about 7% of his DNA altered in space, which has not changed since. Originally, scientists postulated that telomeres in human DNA would be shortened (thus leading to shortening a person’s lifespan). But, in Kelly’s case, her telomeres and telomerase (parts of the human chromosome linked to aging) have actually been lengthened, leaving scientists with many questions as to whether a person’s life could be extended beyond- above. Numerous reports show that aging slows down in space, which could stimulate the creation of future technologies for humans.

The potential in this field is great, and Berkovich noted that unlike Asian countries, like Japan, Israel’s population is relatively young and has just started to age, making the whole field of technological longevity in Israel relatively new. . “Most of the 167 longevity startups are still in the pre-seed stage,” she said.

Another limited company has created a device that can accomplish feats such as removing scar tissue from the heart, healing fractures, or healing scars from burns. “It could become a commercial product that people could order from eBay and even use at home,” Herman said. “It revolutionizes what we know about health products and fundamentally changes our current understanding. “

Next on the horizon

The team is co-led by Herman, business and technology expert, Yaron Sagi, strategy expert, Udi Danhirsh and his partners Berkovitch and Burt Ross, as well as financial advisor Laurent Bensimon who has worked in banks in the past. Barclays, CITI and Merrill Lynch. . He also sports Ofer, a senior executive and former employee of the Israeli Defense Ministry who has led aerospace programs, and advises TYPE5 on space technologies and regulations. Ofer was also the technology manager of the Israel Space Agency’s ULTRASAT program, a science satellite designed to observe objects in the ultraviolet (UV) field, such as supernovas, and will help scientists understand ever-changing sources of radiation. In the universe.

“We realized we needed a multidisciplinary group that not only understands how to approach the complex issues of the space industry, but can also look at how to enter the market and look at the legal and financial aspects,” Herman explained. TYPE5’s current financial partners are Swiss Bank Corporation, an investment firm that assists the company with banking sector regulation and private clients who wish to invest in the fund. “We want to help entrepreneurs achieve their goals, which requires strong financial support. “

Hope for the industry is growing and could pay off big later. According to a NASA estimate, for every dollar the organization receives in government funding, it would bring in between $ 7 and $ 21 to the American public. “This translates into huge potential for space technology spillovers in any market, be it energy, clothing or even food,” he said.

As for the sequel on the horizon, TYPE plans to announce its holding companies by the first quarter of 2022. And, pandemic permitting, it hopes to host the Space Tech Nation Expo conference in Tel Aviv in May 2022. , alongside technology industry leaders and other space technology partners. “This summit will bring groups together and help propel the industry into orbit to provide capital in an entirely new market,” Herman concluded.


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