Can you tell us more about InnoSource?
InnoSource by Toledo Capital AG is an advisory firm in the area of innovation scouting and corporate venturing located in Zurich. We work with corporates in the DACH region and introduce to them technologies of startups from the highly innovative Israeli startup ecosystem. The services we provide include strategic co-development, implementation of buy-in and investment advice. We assist corporates in the process of gaining a competitive edge by tapping into the world of innovation and technology.
Most Israeli startups that InnoSource is working with have already successfully entered other markets. This makes it possible for us to immediately adapt their product offerings to fit the DACH market. We work with startups from diverse industries, including health care, medical devices, food tech, e-commerce, cybersecurity and logistics.
Our aim is to always work with startups we understand. InnoSource leverages the diverse and complementary knowledge of both the advisory team composed of twelve members, and the five members of the advisory board. Hence, we always have someone on board that has experience or insights into the industry the startup we are working with is in.
After understanding the requirements of the corporates, we source and hand pick the most promising startups from our strong network. InnoSource introduces the startup to corporates, supports the development process and continues to manage the relationship afterwards.
There is a difference between the business culture of Israel and the DACH region, as well as a disparity in how corporates and startups do business. InnoSource bridges such gaps by being an independent and neutral intermediary that helps both parties to reach a common goal. Based on the numerous testimonials we have received from our clients, we have been very successful in doing so.
What are some challenges you have faced so far?
There is a mentality difference between corporates and startups. For example, innovation is on the agenda of every corporate, but it is not necessarily the priority. Once we introduce a startup to a corporate, they of course want an immediate answer. At the beginning of the relationship, calls are often scheduled weeks apart. However, once the corporate is fully committed and engaged, both parties cannot wait to see the end result.
It is a long process, and at InnoSource, we are the neutral party between managing expectations of corporates and startups and we finalize an agreement of mutual benefit. In fact, the challenge often lays in the corporates’ complexity as many departments are involved in the decision-making process, from management to innovation, business development to R&D.
Why did you found InnoSource?
Originally, I was born in Germany. I studied banking and finance, worked for Deutsche Bank, and emigrated to Israel in 1998. I found ground within the Israeli startup ecosystem when I worked for two single-family offices that invested into the early Israeli startups.
At the end of 2007, I was recruited by the first International Bank of Israel in Zurich. At the time, my plan was to do this as a short assignment to later advance my position within the bank’s organization in Israel. At the time, the four big banks, as well as the National Bank in Israel, were actually led by female CEOs.
However, I ended up staying in Zürich, got married and after working for more than seven years at the bank, I joined Toledo Capital AG. As a boutique multi-family wealth management firm with many of our clients being Israeli entrepreneurs, the company also has a strong focus on the Israeli market. Nonetheless, investing into startups does not fit into the risk profile of such clientele regardless of there being a lot of investment potential in the Israeli startup ecosystem.
In 2020, throughout the year and despite the coronavirus pandemic, 9.5 billion USD were invested into Israeli startups with 19 exits and 1 unicorn. In comparison, 8.4 billion USD were invested into Israeli startups in 2019 with 132 exits and 19 unicorns. In other words, it’s a very, very vibrant scene. It is second only to Silicon Valley.
As I am connected to the key players of the Israeli market, I decided to seize this opportunity. Some of the successful founders are clients of ours but there is so much more there, and naturally, it all goes first to America because there is a symbiosis between Israel and America on this subject.
Something needed to be done on the development side in the DACH region, because I know both mentalities very well and can maneuver well in between them. In addition, I could offer the DACH companies the access to the Israeli network.
Surprisingly, there are already nine big companies in Switzerland with an innovation scout in Tel Aviv. With InnoSource, we open the doors also to other companies that do not have such a budget allocated. In comparison, there are more than 30 German publicly traded companies which have people sourcing innovation for them from the Israeli market.
What drives you?
Throughout my career I faced several challenges already, starting from the dot-com bubble to the work at the World Trade Center, and the major financial crisis of 2008. Despite the hardships that we may face, especially during this pandemic, I find the potential that still lies ahead of us very encouraging. The success stories that we have achieved so far motivate us to continue further. There are many opportunities out there and still a lot waiting to be discovered.
Can you share one lesson you’ve learned to date?
A deal is not done until it’s done! Things may seem to be going very well, but they can suddenly change at the very last second. Thus, it’s very important not to count on something uncertain. This is a lesson I also shared with the InnoSource team.
What is your hope for InnoSource?
Our mission is that more corporates will learn about us and see the added value in supporting them in their quest for innovation.