Hi-tech scouting has become highly popular in recent years, in direct correspondence with the huge growth in the Israeli start-up industry.
This growth encouraged the influx of scouters to the Israeli hi-tech market, covering a wide range of activities. Some of them are lone start-up “hunters” working for a multinational corporation (MNC) or foreign company, some are official MNC venture entities operated either by a local scouting team or by a scouting center, some operate as accelerators and incubators run by either MNCs or VCs, and some are agents trying to introduce local start-ups to potential capital. They all share a common goal: to be the first to find the next best idea.
In a competitive world, in which companies rise and fall based on their technological leadership, many companies have realized that they must open their doors to new, original and out-of- the-box innovations that are often developed far away from their offices. In fact, these advanced technologies might even originate in a dark basement or local small coffee shop in Tel Aviv.
Many Israeli scouting and innovation centers focus on finding promising early stage start-ups. Early identification allows the corporation to shape the start-up or the technological direction according to its needs while keeping an open eye on its potential future acquisition.
Furthermore, MNCs’ scouting centers allow them to acquire an organic team with proven experience and success. This marks another advantage of scouting centers: often it's easier to establish an R&D center in Israel through an acquisition rather than from scratch.
The number of MNC R&D centers in Israel, many of which started out through scouting offices that led to an acquisition of an Israeli start-up, provides direct evidence of the impact of scouting. Among the acquired companies that became new MNC R&D centers in Israel are the HP R&D center, established following the acquisition of Indigo; the Apple R&D center, established following the acquisition of Anobit; the Siemens R&D center, established following the acquisition of Solel Solar Systems; Facebook’s R&D center, established following the acquisition of Onavo; and many more.