Silicon Valley of India can offer global stepping stone for Israeli startups, says attaché
"Sometimes the best way to reach a U.S. client is to come to Bangalore and partner with a serious Indian integrator," explained Consul for Trade and Economic Affairs in Bangalore Shai Moses
"As soon as there are Indian investors investing in Israel, the Israeli ecosystem has more motivation to enter the Indian market, the way it does with the U.S. market, and the way it had in the past with the Chinese market. I think this is a trend we will see strengthening over the next two or three years. We will see more Indian investors in Israel and as a result, more Israeli companies doing business in India," says Shai Moses, Consul for Trade and Economic Affairs at the Consulate General of Israel to South India, which is based out of Bangalore.
Moses will be completing his five-year service in Bangalore this coming summer, with his role in South India covering a geographic region that spans 20% of the size of Europe and is home to 350 million people. Besides Bangalore, the Consul to South India is also responsible for cities like Chennai and Hyderabad, each boasting a population of around seven million people.
Moses previously served as a Commercial Attaché to Switzerland and Israel's Deputy Ambassador to the World Trade Organization (WTO). He returned to Israel for two years as the Deputy Commissioner, Import Administration and Trade Remedies Policy at the Ministry of Economy and Industry, but quickly set his sights on receiving the vacated role in Bangalore.
"One of the reasons I wanted to come here was that India is currently the fastest-growing target economy for Israeli export," Moses told CTech. "This is a $2 trillion economy that is aiming to grow to $5 trillion by 2025. In addition, the two countries have very close relations that have really strengthened over recent years and this all means that we see great potential in expanding Israeli export to India."
Israel has three economic attachés in India and Moses spoke of the differences between his mission and that of those of his colleagues in Delhi and Mumbai. He noted that the Bangalore mission was well accustomed to conducting business remotely even prior to Covid-19 due to the tech-savvy nature of the industry in the region, but also because of the fact that Israeli delegations to India in the past usually settled for visits to Delhi and Mumbai and wouldn’t venture to Bangalore even prior to the pandemic.
"What is unique about the Bangalore mission is that it has a strong focus on the tech sector. There is a very developed tech industry in Bangalore, including aerospace and cyber, so our orientation is more cyber-focused compared to the traditional sectors of partnerships between Israel and India like agriculture, water, and medical equipment," explained Moses. "Something else that is unique about Bangalore and South India is that the leading Indian IT Integrators are headquartered here and these are all essentially global companies, like Infosys, TCS, and Tech Mahindra. These are companies that provide services across the globe, so when a relevant company contacts us, we put them in touch with partners that can help them enter the Indian market as well as integrate their solutions in the global market. Sometimes the best way to reach a U.S. client is to come to Bangalore and partner with a serious Indian integrator."
One such partnership saw Bangalore-based Flipkart, which was acquired by Walmart at a valuation of over $20 billion in August 2018, purchase Israeli startup Upstream Commerce a couple of months later for a sum estimated at $30 million. Upstream Commerce was purchased to further strengthen Flipkart's selection and pricing capabilities and bring advanced data science-based intelligent solutions to India to help local sellers boost sales and better serve Flipkart customers. Following the purchase, Upstream Commerce turned into Flipkart Israel, operating as an innovation and excellence engineering center for the retail giant, with focus on AI, ML, algorithmic research and analytics solutions.
Moses said such a deal proves that the preconceptions that some Israeli entrepreneurs have about India are vastly exaggerated.
"When I first arrived here there was a stigma that it is difficult to do business in India, that everything takes a long time and that maybe partners aren't very reliable. There were some Israeli companies that didn't want to do business here as they had been burned in the past," said Moses. "There is a grain of truth to this, but the reality wasn't as bad. Part of the challenge I took upon myself was to try and understand this. What I found was that a lot of the problems are simply solved by connecting serious people from both sides.
"There is no doubt that over the past four years the relationship between the countries has become a lot warmer. In my time here I have seen an increased interest in Israel and Israeli tech and one of our most important jobs here is to filter between the more and the less serious interest."
Moses revealed that during his time in Bangalore the mission aided more than 1,000 Israeli companies, resulting in deals reaching a total of $500 million.
"I can see with my own eyes the accelerated growth here. But while we are seeing significant growth, India is also focusing on developing its own economy. The Indian VC industry is mainly focused on investing in the local market, just as the Israeli VC industry mainly invests in Israeli companies. Nevertheless, we are always trying to expose Israeli startups to Indian VCs and I can certainly see a positive trend,” said Moses. “Israeli companies are usually more focused on B2B than B2C, so as long as they have a good solution they will be able to sell it to an Indian company just as they do to an American company because they will both want it and will be willing to pay accordingly. There are many ongoing processes, but the bottom line is that if you have a good and innovative product you will find a market for it here.”