USA-India-Israel Collaboration Report 2018

USA-INDIA-ISRAEL Collaboration:An Ocean of Opportunities

January 2018

2Source: World Economic Outlook Database, World Bank Doing Business 2018 Report, The Global Innovation Index 2017 Report, NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, Economic Times, Crunchbase, Zinnov Research and Analysis

USA-India-Israel (UII): As-is Innovation Landscape

USA INDIA ISRAEL

GDP1 | GDP Growth2 $ 19.4T | 2.2% $ 2.4T | 6.7% $ 0.35T | 3.1%

Ease of Doing Business Ranking3 6th 100th 54th

Global Innovation Index Ranking4 4th 60th 17th

# Startups 50,000+ 5,000+ 5,000+

Total Funding $ 40-45B $ 3.5-4B $ 4.5-5B

# Unicorns 124 10 3

# Incubators/ Accelerators 1,500+ 190+ ~190

Innovation Indicators

Notes: 1. Current Prices 2017, 2. Annual Real GDP Growth 2017, 3. A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm. The rankings incl. 10 topics - Business Rank, Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Protecting Minority Investors, Paying Taxes, Trading across Borders, Enforcing Contracts, Resolving Insolvency, 4. Global Innovation Index is a function of parameters such as ICT services exports, graduates in science and engineering, e-participation, presence of global R&D companies, government’s online service, general infrastructure, creative goods exports, knowledge impact, and intellectual property payments

3

USA INDIA ISRAEL

Source: Zinnov Research and Analysis

The three nations display unique characteristics of Innovation

USA: The Nucleus of ‘Breakthrough Innovation’

India: The Hub of ‘Frugal Innovation’

Israel: The of Center of ‘Sustainable Innovation’

Legend High Medium Low

Innovation led by unique technological advances creating newer market categories or disrupting consumption patterns of existing products and services

Innovation focused at substantial cost reduction while ensuring quality, concentration on core functionalities, and aligned to country-specific requirements and challenges

Innovation led by sustainability considerations – esp. social needs and national security – integrated into the value chain from idea generation to R&D and commercialization

Breakthrough Innovation

Frugal Innovation

Sustainable Innovation

Innovation Types

Rating of Countries across Innovation Types

Innovation Entities

Enterprises/ MNCs

Academic Institutions

Start-ups Government

4Source: Federal Labs, Google Finance, Crunchbase Unicorn Leaderboards, Milken Institute Report, University Zinnov Research and AnalysisNotes: 1. 2017, 2. Startup Genome 2017; 2. Market cap of all companies as on 11 January 2018

USA: The Nucleus of ‘Breakthrough Innovation’

Global Tech Titans Platform Centric Companies Deep-tech Defense/ Aviation

• Combined market cap of

$ 2.9T• World’s first ride sharing company

launched in 2009

• Top unicorn with valuation of $ 69B

• Introduced semi-autonomous ‘Autopilot’ feature in 2015

• Market cap of $ 58B greater than Ford ($ 52B)

• Largest accommodation provider in the world

• 5th largest unicorn with $ 31B valuation

• 500 technologies licensed & 460 patentsissued since 2014 along with 76 startups created from patented innovations

Examples of Breakthrough Innovation2

Legend: Enterprises/ MNCs Start-ups Academic Institutions Government

50%of Forbes 100 most innovative companies1

50%of the Top 10 global start-up ecosystems are in USA2

49%Reuters 100 most innovative universities1

$ 152BSpend on R&D in FY 2017 Federal Budget

• First successful Mars mission in 1964 by Mariner 4 spacecraft

• Human Mars mission planned in 2030s

• F117-Nighthawk, the first operational aircraft with modern stealth technology introduced in 1983

• Russian & Chinese modern stealth aircraft planned to be introduced only in 2018-19

$ 767B

$ 677B

$ 900B

$ 545B

5Source: NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, Atal Innovation Mission, Live Mint, Crunchbase Unicorn Leaderboards, Zinnov Research and AnalysisNotes: 1. Includes analytics/ advanced analytics, artificial intelligence, IOT, AR/VR, robotics, 3D printing, blockchain

India: The Hub of ‘Frugal Innovation’

Examples of Frugal Innovation

1200+R&D centers setup by global MNCs

700+Total number of advanced tech start-ups1

900+Atal Tinkering Labs planned at schools to drive innovation

~$ 1.5BTotal corpus of Startup India fund by government

Legend: Enterprises/ MNCs Start-ups Academic Institutions Government

Adaptive Innovation

• Based on Amazon’s e-commerce model

• 58% share of India’s e-tail market (GMV)

• Largest Indian unicorn with $ 12B valuation

• Based on Uber’s cab aggregator model

• 0.5M drivers, and serving 102 Indian cities

• 4th largest Indian unicorn with $ 6B valuation

Aerospace/ Defense

• Mangalyaan - 4th space agency to reach Mars at 1/10th the cost of NASA’s mission

• World’s smallest satellite built by an Indian student, weighing just 100 grams

KALAMSAT

Inclusive Healthcare

• Providing prosthetic limb at 1/40th cost compared to USA

• 1.6M+ beneficiaries in over 26 countries

Sustainable Agriculture

• 50% reduction in pesticide usage by using pheromones-based traps to attract crop-damaging pests

• Sprayers for improving farm mechanization which are 30% cheaper than sprayers from other countries

Business Model Innovation Consumer-Tech

• Disrupted telecom industry by offering free services for 1 year

• Offers all domestic voice calls for free

• Data tariff plans 30% lower than competitors

• Reverse Innovation to innovate in India, & developing products for local market (such as portable ultrasound machine)

• Natural refrigerator made entirely from clay which is ~50% cheaper than electric refrigerators (priced at $ 40)

6Source: Economic Times, Forbes, Roland Berger, Zinnov Research and AnalysisNotes: 1. Reuters 100 Most Innovative Universities 2017

Israel: The of Center of ‘Sustainable Innovation’

Examples of Sustainable Innovation

Social Infrastructure

Agriculture Water Power/ Energy

• Reusable plastic trays to collect dew from air

• Reduces water requirement for crops/ trees by up to 50%

• Unconventional water sources to supply ~90% population

• Allows 75% water to be reused (highest in the world)

• Pioneered a technology to convert CO2 to fuels which is 10X more efficient that plant photosynthesis

• Introduced first drip irrigation system which led to significant lowering of water consumption (considering that 60% of the country’s area is desert)

• Harnessing water from air for citizens

• Leveraged by Israeli army in remote areas & combat zones

• System to produce energy from waste water using bacteria

• 7,000 installations in more than 70 countries

Security Infrastructure

Cybersecurity Military/ Defense

• IDF Unit 8200, a cyber security unit estimated to have produced 1000+ startups

• Reported to have taken out Iranian nuclear centrifuges

• Drone to evacuate wounded soldiers from battlefield

• Capacity to carry 180 kgs for upto 2 hours at 120 kmph

• In 2000, Israel became the only country with operational anti-missile system• Focus on taking down cyber

threats

• Used by over 50% of Fortune 100 companies

350+R&D centers setup by global MNCs

$ 10BTotal value of start-up exits (2016)

13,500+Patents by top innovative universities1

24Technology Incubators setup by government

Legend: Enterprises/ MNCs Start-ups Academic Institutions Government

7

USA

Japan

GermanyFrance

United Kingdom

INDIA

Brazil

Italy

Canada

South Korea

Russia

Australia

Spain

Mexico

Indonesia

Turkey

Netherlands

Switzerland

Saudi Arabia

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

Source: World Economic Outlook Database, Zinnov Research and AnalysisNotes: 1. Excluding China

USA and India: Conduits for targeting global opportunitiesG

DP

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GDP, Current Prices 2017 (in $ B)

Top 20 Global Economies Market Opportunities for Innovation

USA: Gateway to

Developed Markets

INDIA-led Entry to

Emerging Markets Emerging Economies

Developed Economies

A

B

China (High barriers to entry)

8Sources: World Economic Outlook Database, Plunkett Research, Trading Economics, Health Affairs, YCharts, Tech Republic, IDC, Statista, Zinnov Research and AnalysisNotes: All figures for 2017, 1. 2016,

USA: Gateway to Developed Markets

Immense Scale of Economy Large Size of Industries High Technology Adoption

$ 19.4T

$ 11.9T

Country GDP, Current Prices

Total Consumer Spending

Total Government Expenditure

Overall Value of

Imports

$ 6.9T

$ 250B

$ 5.7T

$ 2.2T

Total Retail Sales

ManufacturingContribution to GDP

Overall Size of the

Healthcare Industry

Total Assets of US Banks

$ 3.6T

$ 17.2T

$ 63B

$ 77B

R&D Spend of

Software Companies1

Overall Public Cloud market

SMB Market for

Cloud Services

Big Data and Business Analytics Market

$ 31B

$ 80B

9

Large Scale Available for Businesses Challenges across Social Infrastructure

Source: Worldometers, NCAER Report, Ministry of MSME-GOI, NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017, News18, Bloomberg, NDTV, YourArticleLibrary, iTV Report, Zinnov Research and AnalysisNotes: All Figures for 2017

India-led entry to Emerging Markets

Education

Water

Power/ Energy

Agriculture

Healthcare

1.3B

287M

Total Population of the Country

Estimated Size of Indian Middle Class

Number of Small and Medium Businesses (SMBs)

Total Number of Tech Start-ups

55M

5000+60%

50M

76M

19%

698M

Cropped area dependent on rain

Rural homes don’t have power

Don’t have access to safe drinking water

Gross enrolment ratio (GER) -Higher education

Population at risk for malaria

10Source: Zinnov Research and Analysis

Start-up led collaboration critical to unlock the massive opportunity

Trilateral Collaboration

A. Start-ups ⇄ Enterprises/ MNCs B. Start-ups ⇄ GovernmentC. Start-ups ⇄ Start-ups/ Start-up Ecosystem

D. Start-ups ⇄ Academic Institutions

A

B

C

Enterprises/ MNCs

Academic InstitutionsGovernment

Start-up Ecosystem

ISRAEL

INDIA

USA

4 Entities of Innovation

D

New-age Collaboration Scenarios

Government ⇄ Enterprises/ MNCs

Government ⇄ Academic Institutions

Government ⇄ GovernmentEnterprises/ MNCs⇄ Enterprises/ MNCs

Enterprises/ MNCs ⇄Academic Institutions

Academic Institutions ⇄Academic Institutions

Traditional Collaboration Scenarios

Legend: Traditional Collaboration New-age Collaboration

11Source: NASSCOM-Zinnov Indian Start-up Ecosystem Report 2017; Notes: MAVERICKS – Evolved countries with mature start-up ecosystem; EMERGENTS – Countries where start-up ecosystem is evolving at a rapid pace aided by increasing investments, govt initiatives, etc.; ASPIRANTS – Countries where start-up ecosystem is beginning to grow; however, lacks in terms of enablers such as investments, govt. Initiatives, etc.

Rapid acceleration of start-up ecosystems in India and Israel

Start-up Activity Index= f [Landscape (Total Start-ups, Start-up Per Capita, Acquisitions), Unicorns Analysis, Investors Ecosystem & Funding, Advanced Tech Focus]

Low

est

Ra

tin

g

Highest RatingLowest Rating

Hig

hes

t R

ati

ng

Govt. Focus & Country Specific Indices= f [Government Initiatives (Govt. Policies, Govt. Funding), Country Specific Indices (Global Innovation Index, Ease of Doing Business)]

*Size of the bubble represents the total number of start-ups in the country

India

Israel

MAVERICKSEMERGENTSASPIRANTS

United States of America• Good progress in govt. initiatives,

requires improvement in global indices

• 2nd highest average Unicorn valuation led by Flipkart

• Top geo for overall start-up base and highest number of unicorns

• Most active investor ecosystem

• Highest number of start-ups per capita

• Highest % of Advanced Tech start-ups

Global Start-up Comparison Framework

12Source: Economic Times, Live Mint, Reuters, University Website, OurCrowd Press Release, No Camels Website, Zinnov Research and AnalysisNotes: TIM - Technology Innovation Momentum

A. Collaboration: Start-ups ⇄ Enterprises/ MNCsA

. En

terp

rise

s/ M

NC

sB

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vern

men

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. Sta

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Sta

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Inst

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USA Enterprises/ MNCs – Start-up Collaboration INDIA Enterprises/ MNCs – Start-up Collaboration

Deep-tech

Aerospace/ Defense

Invested $ 5M in the Israeli wireless charging start-up

Acquired for chip development capabilities for $ 320M

Acquired for AI-related capabilities; 16 member team

Boeing HorizonX India Innovation Challenge in collaboration with T-Hub in areas of autonomous, unmanned systems & AI

Acquired for their capabilities on building machine learning systems

Social Infrastructure

Aerospace/ Defense

Targeting Israeli start-ups focused on areas such as clean-tech, water-tech and fintech

Invested in Tel Aviv University’s TIM Fund, to drive innovation in areas like cleantech, healthcare, pharma, etc.

Jointly pursue contracts with Israeli aerospace and defense companies with offset obligations in India

Deep-tech

Plans to setup a technology incubator in Jerusalem in collaboration with Hebrew University and Motorola Solutions

13

Sustainable Innovation

Water Conservation

Accelerator supported by Florida government with Israeli startup in the areas of security, transportation, agriculture, food, etc.

Indian startup with products for waterless bathing selected by US government incubator, Nexus

Cybersecurity

US Department of Homeland Security and the White House to explore partnerships with Israel start-ups

Source: Times of India, Times of Israel, Horti Daily, Aqwise Press Release, Business Standard, Bloomberg Quint, Hindu Businessline, Zinnov Research and AnalysisNotes: NCIPM - National Centre for Integrated Pest Management, NRCG – National Research Centre for Grapes

B. Collaboration: Start-ups ⇄ Governments

USA Government – Start-up Collaboration

ISRAEL Government – Start-up Collaboration

Digital Citizen Services

Aerospace and Defense

Offered solution to Israeli Chamber of Commerce that allows e-sharing of documents for visa application

Israel Aerospace Industries that supplies missile systems, etc. is looking to engage with Indian start-ups in aviation and defense

INDIA Government – Start-up Collaboration

Agricultural Technology

Sustainable Water

Bio-Bee Biological Systems collaborating with NCIPM and NRCG for launching its pest management products in India

Water treatment plant supplying drinking water to city of Agra through release of polyethylene biofilm carriers into water

Defense and Security

Providing solutions for India’s smart border management initiative in partnership with India’s Dynamatic Technologies

CleanLife Products

A. E

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rpri

ses/

MN

Cs

B. G

ove

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C. S

tart

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s/ S

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Eco

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D. A

cad

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14Source: Live Mint, WhartonIndia Website, OurCrowd Press Release, Business Wire, NeuroLaunch Website, Economic Times, Your Story, Zinnov Research and AnalysisNotes: DST – Department of Science and Technology (Government of India), IIFA - Israel-India Friendship Association

C. Collaboration: Start-ups ⇄ Start-ups/ Start-up Ecosystem

Start-up Funding Innovation Challenges/ Hackathons

Incubation/ Accelerator Collaboration

Start-up Partnerships/ Acquisitions

USA

INDIA

ISRAEL

Set up operations in Israel partnering with Israel-India Chamber of Commerce and IIFA

Mobileye’s accident-preventing tech installed in over 10,000 Zoomcar vehicles

Setting up first Indo-Israeli Innovation Accelerator in India leveraging expertise of Tal Caltran (TC Holdings)

• Competition to promote entrepreneurship at global level

• 2 Indian startups in top 10 startups that take part in Israel US Trek, a curated business trip

VC fund access for Indian investors on OurCrowd platform allowing investment in Israel's startup ecosystem

Partnership to expand Zebra’s solution to 20+ countries and 150 healthcare organizations

Partnership for investment, innovation, and dialogue between U.S. & Israeli entrepreneurs across neuroscience/ neurotechnology

• Start-up challenge organized by Embassy of Israel collaborating with DST

• 5 Indian startups awarded access to startup incubators by the DST; Indian winner to travel to Israel

Co-founded a $ 300M VC fund in partnership with Ratan Tata for Indian start-ups

Acquired to support in building of large scale infrastructure and services

Joint venture with ANSR Consulting to launch incubation/ accelerator programs in India

Start-up challenge with emerging startups and investors organized by Wharton School at the University of Pennsylvania

A. E

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FinitePaths

15

MIT-IIT Make In India, a boot camp on social innovation and entrepreneurship at IIT-D campus with students from MIT for development of prototypes and business pitches

Source: Business Insider, India Today, Business Standard, Start-up Hyderabad, Israel21c, Press Releases, University Websites

D. Collaboration: Start-ups ⇄ Academic Institutions

Collaboration with Wyss Institute for Biologically Inspired Engineering to develop and license lightweight exoskeleton technologies enabling people to walk

• MIT Global Startup Workshop (2016) organized in Hyderabad targeted at Indian start-ups

• Participants from 70 nations since inception

• Started a 10-week certificate program aimed at entrepreneurs from the Indian startup ecosystem

• Provided guidance to 200 innovators till date

USA Academic Institutions – Start-up Collaboration

ISRAEL Academic Institutions – Start-up Collaboration

Partnership with International Centre for Entrepreneurship and Technology (iCreate) of India to jointly incubate few start-ups from both countries

Strategic partnership to establish startup accelerator, Pinnacle Capsula.Studio in Pune

INDIA Academic Institutions – Start-up Collaboration

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MN

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B. G

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Israel Centre setup at IIM-B focused on business relationships in domains of start-ups, innovation and scaling companies

16

In Summary

Trilateral collaboration between USA-India-Israel can unlock significant potential

Rapid growth of startup ecosystems in the 3 nations emerges as a driving force for collaboration

Encouraging early signals of bilateral collaboration to accelerate innovation

17