In spite of the war against Hamas, an increasingly fragile economy and a sever water shortage, Israeli entrepreneurs are continuing to innovate (hey, it’s not a bug, it’s a feature).   VC Cafe has done a short writeup on each of the 20 19 companies presenting.  You should check out his post and his blog here.

I have a couple of favorites:

• Free Way - aiming to connect existing navigation services and applications into one big shared network. Using that connection, Free Way plans to offer device agnostic, accurate traffic condition & social localized information in real time. Big idea in early stage. Founded in 2009.
• Qoof - brings video to the eCommerce world by producing online videos on products, inserting sales information into videos and promoting them through a distributed, multi-channel, targeted and personalized video commerce network. Qoof is one of the more experienced start ups on this list, and is already working with 500 retailers.

Check out the rest of the list here.  Let us know if you’re attending and what you’re take on the event by emailing us at zack@israelnewsletter.com

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A theme that we have been echoing here at Israelnewsletter.com is the fact that many in Israel are living in a bubble and don’t realize that the economic tsunami that has swept the world will cause damage in the holy land. Globes has a great interview with Gemini Israel Funds general partner Menashe Ezra. He says, “Warren Buffett said that we’re facing an economic Pearl Harbor, and I feel that, in Israel, the understanding that we’re at war has not sunk in.” Ezra added, “One of the things that is bothering me is that we’ll experience a local patriotism. I think that globalization will take a few steps back. In Germany and the US, people realize that if they buy a locally made car they’re helping themselves.”

He goes on to say that he doesn’t think that money will be readily available to hi-tech entrepreneurs. “In recent years, we had too much money here. There was a bubble, and entrepreneurs could fund companies without paying a price. They left big companies and got similar salaries at private companies and start-ups. They received stocks and options. This had never happened before in Israel or in the world. It happened because of the surplus of money and incautious behavior, and it created distortions.”

The picture Ezra paints isn’t all that pretty for the short-term future of Israeli hi-tech. On the other hand I think we need to keep in mind that Israel weathered the internet bubble storm, and learned a tremendous amount in the areas of running businesses day to day. I think that that experience will help pull Israel through this global crisis, and the Israeli technology scene will be as strong as ever.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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With global capital markets in the middle of a meltdown, it would be expected that the Israeli hi-tech startup industry would be in shambles. With most investors hunkered down waiting for the storm to pass, they wouldn’t seem to be in the mood to fund new companies. Well that may be what you would expect, in reality it’s not the case. According to a report in Globes the number of startups that have closed their doors this year is actually much less than in the previous 2 years. “According to IVC Online, 35 start-ups have closed down since January: 24 companies in the first quarter, six in the second quarter, and five in July-August. For the sake of comparison, 228 companies closed down in 2007 as a whole and the number that closed in 2006 was about the same.”

That hardly sounds the panic whistle. It’s hard to understand why this is occurring but one reason may be that companies have cut out the frivolous expenses of years passed, and are doing a much better job of making whatever money they raise, last.

That’s the good thing about lousy capital markets. It sends a dose of reality to the startup world, that they better shape up and watch their spending or their sole option will be bankruptcy. I guess you can find some good in any situation.

Please see our Disclaimer HERE.

Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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Your cell phone bills may start to get cheaper. Why? Well just like traditional fixed land-line prices dropped to virtually nothing due to new technology, most notably Voice Over IP (VOIP), the same thing may very well happen to your cell phone as well. An Israeli hi-tech start-up, Spikko ltd. is set to launch a free cellular telephone service for handsets with at least 3G capabilities.

According to a report in Globes: “Each subscriber receives the company’s SpikkoPhone software and an Israeli telephone number, which is used to make calls and accumulate airtime, allowing for the placing of calls for free anywhere in the world. The service also offers video and chat services, and will soon also offer e-mail and instant messaging.”

Currently it’s available in Israel only, but the company is working on making the service available internationally. The company estimates that customers will save between 40-80% off existing bills.

It will take time for cellular prices to drop down to levels that we pay with our landlines. It’s not something that will happen overnight, but with companies like Spikko, and others trying to do similar things, I have a hunch that cellphone companies better figure out other revenue streams, like content and other value added services, because it does stand to reason that we will continue to see price erosion on airtime charges.

Please see our Disclaimer HERE.

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Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.

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