Government incentives and an Ohio venture capital fund focused on Israel have drawn Israeli entrepreneurs to a state with top research clinics and a flourishing health-care industry
As the Ohio Department of Development's representative in Tel Aviv, Rick Schottentsein is barely able to keep up with his e-mail these days. He's hearing from Israeli biotechnology companies seeking to hook up with Ohio medical experts, clinics, and investors. "Each week I meet two, three companies interested in finding a connection," says Schottenstein. "It just doesn't stop."
Israel and Ohio may seem like an odd pair, but they're helping each other in ways that may link them as business partners for decades to come. Ohio's health-care industry has doubled over the past four decades, to more than 600,000 employees. The state is home to the Cleveland Clinic, a leading research hospital. Israel, meanwhile, has nearly 200 biotech companies, but it's tough for them to raise capital or sell many products in their small home market.
Helped by state incentives and a Cleveland venture capital fund dedicated to investing in Israel, growing numbers of Israeli biotechs are moving to or finding partners in Ohio. In the past eight years at least 14 such companies have raised funds from Ohio-based backers, and a half-dozen of these have opened offices in the state, says Michael Goldberg, founder of the Cleveland-based Bridge Investment Fund, which has plowed some $5 million into Israeli biotech startups. Another five or so biotechs based in Israel have plans to open offices in Ohio soon, and dozens more cooperate with Ohio groups in clinical research. "While many Israelis still look to Boston or Silicon Valley for support, Ohio has done more than other states to attract Israeli startups," Goldberg says.
BioEnterprise, founded by Cleveland hospitals and universities to support biosciences in the region, helps connect the Israeli companies with capital, medical expertise, and management teams in the state. The group helped Simbionix, a medical device maker that now employs 80 people, transfer its headquarters from Israel to Cleveland. The Global Cardiovascular Innovation Center, a partnership backed by the state of Ohio that funds development of health-related products, has invested in five Israeli biotechs, says GCIC director Thomas Sudow. "Israeli companies provide hospitals here the opportunity to work with leading innovators," Sudow says.
With an office in Tel Aviv, Goldberg's Bridge fund has invested in five Israeli companies. IceCure Medical, based just north of Tel Aviv, will soon start U.S. sales of a device for treating benign tumors. And EarlySense, which is developing technology that helps nurses track crisis situations, has dispatched researchers to Cleveland. EarlySense Chief Executive Officer Avner Halperin says Bridge has "been instrumental in introducing us to hospitals that are potential partners."
The bottom line: Government incentives and an Ohio venture capital fund focused on Israel have drawn Israeli biotech companies to the state.