Five with Barak Singer, CEO of Trendlines Incubators Israel – “We will definitely be willing to invest in entrepreneurs we only met remotely!”
We hosted Barak Singer, CEO of Trendlines Incubators Israel from the Galil. Trendlines has ~60 companies in its portfolio and invests mainly in the medical device and agrifood sectors. In an exclusive interview with Chiportal, Barak says: “Fortunately, more than a third of our portfolio companies have raised funds this year and one company was acquired by an American company at the height of the crisis. Yes, it is possible to raise money and close exits even during the COVID-19 period!” Here is the full interview with Barak:
- How are your portfolio companies dealing with the COVID-19 crisis? (Did they lay off employees, reduce activity, etc.)
We have about 60 portfolio companies. Soon after the onset of the crisis, we realized that this was an event that required reassessment. Together with us, our portfolio companies reviewed their work plans and budgets to make the necessary updates and changes on both operational and budget aspects. At the same time, we continued our fundraising activities for our portfolio companies, including outside investors, as well as from The Trendlines Group. Fortunately, over a third of our portfolio companies successfully raised funds this year and one of our companies was sold to an American company at the height of the crisis. Yes, it is possible to raise money and complete exits even during the COVID-19 period!
- What tips can you give to the CEOs of these companies in dealing with the crisis?
Act fast and don’t wait. Choose one or two members from the board to monitor the company’s thought process and decisions. Remember, a crisis is also an opportunity – to streamline, examine and challenge work plans, think outside the box, shrink (if necessary) and prepare for post-crisis growth.
- Right now it seems that everything can be done remotely. Would you invest in a company after only meeting with the developers remotely?
That’s the million-dollar question. For the investments we make are in early stage companies, soon after they are formed, I think the answer can certainly be yes. Would this also be true for more advanced companies, with sales, equipment and activities that need to be examined in the field with foreign investors which require more due diligence and testing in overseas investments? It is hard to know, only time will tell. It should be noted that investors will indeed utilize a large part of their resources to support their portfolio companies, but on the other hand, a crisis also presents new opportunities and investors who adapt quickly to the times will find attractive new investment opportunities.
- What do you think will happen once the COVID-19 crisis ends? Will everything return to normal or has the business environment changed forever?
The world needs innovation, I anticipate that the high-tech locomotive will continue to operate and strengthen after the crisis. In the context of Trendlines, we focus on investments in medical devices and agrifood, two industries that are gaining additional magnitude due to the COVID-19 (e.g. the need for remote patient care and out-of-hospital surgeries, as well as increasing agricultural produce and crop yields). These sectors, which have historically received smaller investments in comparison to other sectors (especially in Israel), will now receive greater support during the crisis and after.
In terms of the business environment, there will be changes, such as working from home in various hybrid models, as well as increasing the use of video calls as a substitute to international meetings and conferences. Restrictions on international flights are one of the most concerning issues, I hope that a model will soon be found that will allow the renewal of international flights to and from Israel.
- Any general conclusions or insights from the COVID-19 crisis? What would you have done differently, what should the Israeli government do for the industry, what are your expectations of suppliers, customers and employees?
Regarding supporting local high-tech, the Israel Innovation Authority is worthy of praise. At the beginning of the crisis, the IIA faced the fact that it needed to operate without a budget from the State, which delayed its support to local high-tech, but they did manage to receive an emergency budget and have since launched many support programs. The effects of this crisis will continue to accompany us in the coming years. It is important for additional plans to be made, along with the current plans that have assisted in overcoming the short-term needs and will anchor long-term plans for increasing investments in local high-tech.