Harnessing the fintech revolution

A pioneering agreement between an Israeli venture fund and Intesa Sanpaolo is revolutionising fintech funding

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Ashley Norris

05/07/2018

“If you’re looking for a place of innovation you have to be in Tel Aviv,” asserts Oded Distel Director at the Investment Promotion Center and Israel NewTech
Ministry of Economy and Industry. “Fixing the world is what we are trying to do.”

The figures certainly back him up as Israel boasts one start-up for every 160 inhabitants – more than any other country in the world. No wonder it is called the “start-up nation”.

However, the big challenge facing many Israeli start-ups is in the implementation of their technology at an international level. To succeed on a global stage, Israel’s innovators often need to partner with multinational organisations who can help them to experiment, develop and ultimately scale.

It’s a philosophy that underpins The Floor, a Tel Aviv financial technology (fintech) incubator co-founded in 2016 by Italian banking group Intesa Sanpaolo, which supports Israeli start-ups with office space, mentoring and growth. It acts as a gateway to the Israeli fintech ecosystem; a shop window for the country’s thriving community of businesses that have developed proven technologies that are ready to be adopted by established banks.

The aim of Intesa Sanpaolo, and other founding banks involved in The Floor, is not to invest in Israeli fintechs but to identify and refine promising technologies that can help them digitise their operations more quickly.

The country’s start-ups and institutions welcome this collaborative approach. “The Israeli mentality is different to the European,” says Distel. “It creates great stories but also sometimes misses opportunities. Institutions like the Intesa Sanpaolo bank can be great matchmakers and help Israeli start-ups.”

Intesa Sanpaolo Innovation Center’s labs in Turin, Lucca and Milan co-operate with Israeli companies to develop their first proof of concept. “We work with 100 people with different skills, from mathematicians and economists to data analysts,” says Fabio Spagnuolo, Head of Network and Promotion of Innovation Culture at Intesa Sanpaolo Innovation Center.

"We are creating the right matchmaking between start-ups that offer innovation and, on the other side, corporates looking for innovation in new technology."
Fabio Spagnuolo, Head of Network and Promotion of Innovation
Culture at Intesa Sanpaolo Innovation Center

 

The benefits for start-ups that join The Floor materialise in a number of other ways, including the provision of significant finance.

“Start-ups have access to $1billion investment plus a gateway to international markets. It is promoted by a Chinese fund with four different banks,” says Spagnuolo.

Intesa Sanpaolo has also recently partnered with Israeli venture fund OurCrowd to help companies unlock even more of the marketplace. The internationally renowned venture capital and equity crowdfunding platform has invested in more than 150 portfolio companies around the world and has raised more than US$750 million.

“In the past three months OurCrowd made three very important exits with millions of dollars,” explains Spagnuolo. “They select the best Israeli start-ups. This is a great opportunity for our private clients to invest in such start-ups, but also it’s a great opportunity for our Italian start-ups to be on the platform.

“We understand what it takes to get a start-up to work with a corporate,” says Josh Wolff, senior VP of OurCrowd. “There are lots of opportunities that never make it to the big time and together we’re going to deliver those. Those at Intesa Sanpaolo are not just talking about innovation but getting their hands dirty in the area of innovation – and that makes them great partners.”

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