The Coronavirus Crisis Can Help See Who is Faking it in Israel’s Tech Industry, Says Japanese Investor

Nobuyuki Akimoto, managing director at AT Partners, a Japanese venture capital fund that invests in Israeli funds, spoke about Japanese investments during the Covid-19 era

Adi Pick 15:5026.05.20
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The coronavirus crisis is an excellent opportunity to find out who is really a major player in the high-tech sector and who is faking it, Nobuyuki Akimoto, managing director at AT Partners, a Japanese venture capital fund that invests in Israeli funds, said at the ‘Big In Japan’ webinar organized by Japanese insurance company Sompo, Samurai Incubate Israel, IN-Venture (Sumitomo), and the Pearl Cohen law firm.

 

"Corporations’ need to save on costs during the coronavirus, might lead to a certain slowdown and the appetite for innovation might shrink, but on the other hand, this is an excellent time to find out who is really thinking like a major player when it comes to working with startups and who is faking it and disappears at the moment of truth," he said.
Yinnon Dolev, head of Sompo’s Israel Digital Lab. Photo: Tal Azulay Yinnon Dolev, head of Sompo’s Israel Digital Lab. Photo: Tal Azulay
"There will now be pressure on the corporations to cut expenditure and to become more efficient, and consequently startups will be required to show their economic advantages and especially how, with their help, it is possible to streamline work and cut costs. Unfortunately, most presentations by Israeli startups focus on what we can do and how we can increase your ability and that's great. But what is your ability to help me as a corporation cut costs? A large corporation will find it difficult to adopt any new technology without the strong marketing value and so the key to entering Japan is creating this effect and presenting it to the corporations," Yinnon Dolev, head of Sompo’s Israel Digital Lab said at the event.

 

"During the coronavirus period the Japanese interest in innovation in the health system began to increase. This is different from what we see in the American health system, which is working under pressure and must speed up regulatory procedures in order to bring things to market as swiftly as possible. Compared to the U.S., the cost of a home visit from a doctor in Japan is not high so doctors’ visits are generally conducted face to face. At the moment, however, the system understands that there are efficiencies to health services through digital means. I assume that this will only continue to grow," Dolev said.

 

"In recent years, we see major interest from Japanese companies in Israeli industries. There are more than 220 Japanese companies with activities in Israel, and some of them have local teams,” Guy Lachmann, senior partner at the Pearl Cohen law firm said during the webinar. “This trend is continuing to grow. 70% of the investments are made by companies for whom this is the first investment in Israel and this is a very optimistic sign.”

 

"There will be changes in the relations with powers in Asia, and it's possible that China’s influence in Israel will fall, and we hope that Japan will take advantage of the opportunity, and offer a way for us to see more and more Japanese companies investing in Israel and in other sectors and apart from technology," he said.

 

"Like every post traumatic syndrome, the influence of the coronavirus in the short term will disappear, people will exit lockdown and will see that there is still a world outside, so the appetite to implement technologies and investments will recover," Eitan Naor, Managing Partner at IN Venture, the Israeli venture capital fund of Japan’s Sumitomo corporation explained. "We are very optimistic but still cautious about the investments and looking for entrepreneurs and companies that manage their money carefully. During a crisis cash really is king, and we want to make certain that investors will understand the importance of managing money and will understand the importance of being very precise about the marketing abilities of the product."

 

"The concern about a recession in Japan will have no dramatic influence on our investments. We understand that startups need financing and as investors, we want to support them and speed up the process. We know that every dollar that we bring to the table today is valued much more than in the past, and we are not only talking about money but also supporting startups that are entering Japan and connecting them to future companies and investors," said Shirley Binder, Head of the Israeli branch of Japan’s Samurai Incubate fund Israel. "As a Japanese-Israeli venture capital firm, we must be more attentive to startups and provide them with immediate responses. This is something essential that all of us investors must currently adopt."

 

To sum up, Arun Poojari, General Manager Asia-Pacific and Japan for startup SparkBeyond, said that, "External changes always worked well in Japanese history. The Japanese market opened up after being closed for 300 years and there are many changes that have taken place over the past 10 years. I hope that we are talking about continuing change for Japanese corporations. We clearly see that there will be large corporations that will adopt new work practices and will encourage innovation, and will give a prominent place to technology companies.