Transportation

Israeli technology and the future of transportation

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Max Marine

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Max Marine is the investment team analyst at iAngels.

To get from Point A to Point B 12,000 years ago, we crawled, walked, jumped, tumbled, rolled, skipped, hopped, swam, danced, jogged, ran and sprinted. But then a small tribe in Azerbaijan created the first boat technology and we started moving ourselves and our things across rivers and streams.

A 7,500-year trot into the future and humans domesticated horses, a biological technology that helped us move ourselves and our things faster along crooked paths and natural trails.

It only took 5,200 more years before the steam locomotive ignited the industrial revolution, paving the way for Henry Ford and the Wright Brothers to help us move across countries and continents with relative ease and affordability.

The quantum leaps in productivity created by the car, train, ship and plane have dramatically changed our lives and movements. But today, we’re at the forefront of a new revolution in mobility. From on-demand ride-sharing and navigation, to car ownership and autonomous connected vehicles, software has finished breakfast and is eagerly chomping away at lunch. And like most industries in which software is eating the world, Israeli innovation is playing an integral role.

In the last four years, advances in computer vision and navigation technology have helped put Israel on the automotive map. In 2014, Mobileye, an Advanced Driver Assistance System (ADAS), raised $890 million in the largest IPO in Israel’s history. Only a few months earlier, Google bought Waze, a crowdsourced navigation app, for $1.1 billion, the third largest acquisition in Israel’s history. Many questioned the valuation and the logic of the acquisition — but it appears that Google’s foray into autonomous vehicles dovetails nicely with a ubiquitous mapping application that already knows your travel patterns.

This past October, Google launched a service on top of Waze called RideWith, an Israel-based pilot connecting drivers with passengers who can “pitch in” for their daily commute. Moreover, Waze announced its new SDK back in January, and Israel’s Nexar, an AI dashcam app, was chosen as one of Waze’s early adopters. Nexar’s application crowdsources road footage to enhance safety and navigation, and just raised a $10.5 million Series A led by Mosaic Ventures.

Oh, and let’s not forget Moovit, an Israeli application crowdsourcing public transit that raised $50 million from BMW, Sequoia and Nokia, at a $400 million valuation, and recently launched its own ridesharing service called Carpool in Israel.

While Uber, Lyft, Hailo, Flywheel, Didi Kuaidi (China), GrabTaxi (SE Asia), Ola (India), Waze and Moovit attempt to capture their fair share of the daily commute and displace the DUI with a GUI, they’ll have to compete with three other Israeli companies: Juno, Via and Gett. Fresh off the heels of Rakuten’s $900 million Viber acquisition, Viber’s former CEO Talmon Marco unveiled his latest pursuit: Juno, an ethical, socially responsible ridesharing service. Juno raised $30 million and recruited thousands of top-rated Uber drivers by offering them equity, better pay and better benefits.

Months later, Israelis Daniel Ramot and Oren Shoval, PhDs who previously led engineering projects for the Israeli Air Force, announced Via’s $100 million round. Walk along the arterials of Tel Aviv, and you’ll see 10-person shuttles that traverse north to south, charging $1-2 per person for the service. Now you know where the idea for Via came from.

More impressive still is VW’s $300 million investment in Shahar Weiser’s Gett, an Uber rival generating $500 million in revenue across 60 cities. There are 12 companies left standing in the global ridesharing market, and nearly half were built in a country of 8 million people and the size of New Jersey.

Israelis, known for their deep technological capabilities, are building much more than ridesharing apps. Look no further than Harman’s 2013 acquisition of iOnRoad, an augmented reality application for the car’s dashboard, its $200 million acquisition of Red Bend in 2015 for its over-the-air updating technology and services for the connected car and its 2016 $70 million acquisition of TowerSec, an Israeli automotive cybersecurity company specializing in network protection for connected vehicles.

Several months ago, TechCrunch rolled up the curtain on Otto, a startup of 41 employees led by 510 Systems’ founder Anthony Levandowski, who built the technology underlying Google’s self-driving car, and Lior Ron, former Google Maps lead and CTO of the Israeli military’s largest software intelligence unit. The company is developing technology that will enable 18-wheelers to drive autonomously. From anti-car hacking company Argus, which raised $26 million in September, to the stealthy Otonomo creating an agnostic API for the connected car, Israeli innovation is surfacing across all layers of the global automotive supply chain.

Yet Israeli disruption has crept into the post-supply chain, too. Take Vroom, for example, which was led by Allon Bloch, the former co-CEO of Wix and venture partner at Greylock Israel. Vroom bills itself as the Zappos.com of used cars and raised a $95 million Series C in December to buy Texas Auto Direct, the U.S.’s largest independent used-car dealership. This comes on the heels of June’s $54 million Series B from General Catalyst and T. Rowe Price and $300 million in projected 2016 revenue. Vroom’s biggest competitor, Beepi, raised $70 million in August at a $500 million valuation.

Not surprisingly, Beepi’s co-founder and president, Owen Savir, was the former founder and CTO of iContact, the largest education technology company in Israel. Then there’s Engie, the stealth connected device startup backed by Waze co-founder Uri Levine, that monitors the health of your car, diagnoses problems and collects quotes from nearby mechanics. The technology powering these global marketplaces was “Made in Israel.”

Call it the shared economy, the on-demand economy or the Internet of Things. Call it the ridesharing era, the connected car revolution or the market network phenomenon. Nomenclature aside, the way humans get themselves and their things from Point A to Point B is fundamentally changing yet again.

Moovit, Waze, Juno, Via and Gett are crowdsourcing urban travel; Mobileye, iOnRoad, Nexar, TowerSec and Argus are enhancing safety and security; and Vroom, Beepi, and Engie are building the automotive marketplaces of the future. Today, captivated behind our smartphones and laptops, we sit at the crux of another quantum mobility leap powered by Israeli technology.

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