“[The Abraham Accords] are not just about business, it's about basically taking away the sand equivalent of the Berlin Wall. There was this artificial divider in the heart of the world.”
Jonathan Medved is a serial entrepreneur and according to the Washington Post “one of Israel’s leading high tech venture capitalists”. Medved currently is the founder and CEO of OurCrowd, the leading global equity crowdfunding platform for accredited investors and angels. OurCrowd has $1.2B in commitments and has made investments in 200 companies and funds, and 30 exits since its launch in February 2013.
Venture capital has long been inaccessible to the majority of investors who don’t have $5-$10m available for a limited partnership. A crowdfunded platform gives individuals and institutions an opportunity to invest in venture portfolios. “Today, these private companies stay private much longer. When they finally go public, most of the money has been made by smart investors in the private markets and those are venture capitalists.”
The Abraham Accords represent a major moment in the relationship between Israel and the UAE and Bahrain. While Israel was not at war, the normalization has already created massive business opportunities with governments of the US, UAE and Israel announcing a $3 billion fund. There are now 112 direct flights between Israel and the Emirates where there were none before.
LISTEN AND SUBSCRIBE
SPEAKER
Jon Medved
Founder & Chief Executive Officer
OurCrowd
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darsie: (00:07)
Hello, everyone. Welcome back to SALT Talks. My name is John D'Arcy. I'm the managing director of SALT, which is a global thought leadership forum and networking platform at the intersection of finance, technology and public policy. SALT Talks are a digital interview series that we launched during this work from home period with leading investors, creators and thinkers and what we're really trying to do during these SALT Talks is replicate the experience that we provide at our global SALT conferences and that's to provide a window into the mind of subject matter experts as well as to provide a platform for what we think are big ideas that are shaping the future and we're very excited today to welcome a speaker from our last SALT conference in SALT Abu Dhabi in 2019 and a leading Israeli entrepreneur, Jonathan Medved of SALT Talks.
John Darsie: (00:56)
Jonathan, welcome, thanks for joining us. Jon is a serial entrepreneur and according to the Washington Post, he's one of Israel's leading high tech venture capitalists. In 2008, the New York Times supplement, Israel at 60, named Medved as one of the top 10 most influential Americans who have impacted Israel. Medved is the founder and CEO of Our Crowd, which is a leading global equity crowdfunding platform for accredited investors and angel investors. Our Crowd has 1.4 billion in commitments and has made investments in 200 companies and funds and made 30 exits since its launch in February of 2013.
John Darsie: (01:36)
Our Crowd exits have included JUMP Bikes, which was sold to Uber; Breathe Cam, which was sold to Canon; Argus, which was sold to Continental; Crosswise, which was sold to Oracle; and Replay, which was sold to Intel. Bloomberg Business Week said on May 7, 2015, that Our Crowd is hands down the most successful equity crowdfunding platform in the world right now. TheStreet.com described Our Crowd as crowdfunding for real investors. Prior to starting Our Crowd, Jonathan was the co-founder and CEO of Vringo and the co-founder and general partner of Israel Seed Partners with $262 million under management. And I know it's a great source of pride for us, I referred to the fact that Jonathan spoke at our SALT Abu Dhabi conference in December of 2019.
John Darsie: (02:26)
That was well before the Abraham Accords were announced, the peace deal if you will between Israel and Bahrain and the UAE, and we were very proud to have brought Jonathan into the UAE to speak at our conference and start building those bilateral commercial relations which have resulted in now diplomatic relations and we're very excited to help Jonathan and Our Crowd build on that success and given his open mindedness and his commercial instincts, he has already been one of the first Israelis to build business ties into the UAE. So, again, we're very proud of helping facilitate that and we're also very proud to have Jonathan on to talk more about that.
John Darsie: (03:03)
A reminder, if you have any questions for Jon during today's SALT Talk, you can enter them in the Q&A box at the bottom of your video screen on Zoom and hosting today's talk is Anthony Scaramucci, who's the founder and managing partner of SkyBridge Capital, which is a global alternative investment firm. Anthony is also the chairman of SALT and with that, I'll turn it over to Anthony for the interview.
Anthony Scaramucci: (03:23)
John, thank you and Jonathan, it's a great pleasure to have you on SALT Talk. The only bad thing about all this, I was hoping to see you in Abu Dhabi in December but unfortunately, we've got that on hold. Obviously, we want everyone to be safe and healthy and we promise everybody we will be back in the region once we're all very confident that those two things can be achieved but before we get into the Abraham Accords and your amazing business, I want to go into your background. I ask every one of our guests sort of the same question. Tell us something about yourself that led you to the journey of starting Our Crowd and where you are today.
Jonathan Medved: (04:03)
Thank you, Anthony and it's great to be back with you and hopefully, it'll be in-person with you, either SALT in the US or back in Abu Dhabi, maybe someday Israel. You never know.
Anthony Scaramucci: (04:18)
I tried to get to Israel twice a year until this whole thing happened and so we'll definitely take you up on that as well.
Jonathan Medved: (04:24)
Cool. I grew up in California in a pretty typical American Jewish family, went to public school, grew up as a product of the 60s and 70s, went up to Berkeley and things sort of changed a bit when I finished my freshman year at Cal and I wanted to go abroad and I asked my parents, like any normal Jewish kid, "Where will you pay for me to go get some seasoning?" And they said, "Israel." So, off I went. I fell in love with the place, ended up learning Hebrew, visiting several times and have been living in Israel for over 40 years.
Jonathan Medved: (05:07)
Now, I was really lucky to get involved in technology from a very early date through another Jewish tradition called nepotism. My late father, Dr. David Medved, was a pioneer in fiber optic communications and I joined the family business. Turns out that I had a liking for tech and helped him raise money and we ultimately sold that company to the Amoco Corporation and that was my first exit. Then three or four companies later, all of them either successfully sold or taken public in New York either on NASDAQ or on the New York Stock Exchange, built a venture capital fund and in 2013, started Our Crowd.
Jonathan Medved: (05:55)
The idea behind Our Crowd was to open up access to the venture capital asset class to the broad range of investors who sort of watch venture capital from afar and say wow, that's great but may or may not have had the $5 or $10 million available for a limited partner's check or didn't understand the sort of esoteric nature of the VC term sheet and we started it and now seven years later, we're about a billion and a half in assets as you spoke about, 60,000 investors worldwide and an increasing number of institutions who are investing in our large and successful portfolio. So, that's my story.
Anthony Scaramucci: (06:40)
Well, listen, I love the story. I want to jump right over ... We're going to talk about venture capital in a second but I want to jump right over to the Abraham Accords. So for people who don't know what that actually means and some of us are super focused on the news like you and me and some of us are focused on finance. What are the Abraham Accords and what does it mean to the State of Israel, what does it mean to the Emiratis, the Bahrainis, what does it mean for the region and what does it mean for your business, Our Crowd?
Jonathan Medved: (07:13)
So, first of all, it's mistakenly called a peace deal and it's not a peace deal because we never were at war with the Emiratis and the Bahrainis. We never had a normal relationship, so it's really a normalization set of deals that now establish full relationships. To give you an idea, I was just in Dubai last week and it took me 20 hours to travel there each way. I had to fly from Tel Aviv to Zurich, hang out at the airport for five or six hours, then Zurich back to Dubai. It's a nightmare and on the way back, I had to go via Frankfurt.
Jonathan Medved: (07:56)
As of January, there will be 112 direct flights between Israel and the Emirates, 112 weekly. It's a three-hour flight. What it changes is-
Anthony Scaramucci: (08:13)
Sounds like some pent-up demand, though, huh, Jonathan? It sounds like long lost brothers and sisters trying to get reconnected, right?
Jonathan Medved: (08:20)
Big time. I was talking today to an Emirati and I said, "Do you think we can use these 112 flights?" And he said, "Are you kidding? We're going to need more," because everybody he knows wants to come to Israel and everybody I know wants to go that way. So it's not just about business, it's about basically taking away the sand equivalent of the Berlin Wall. There was this artificial divider between ... In the heart of the world, in other words, if you look at the map, you'll see that Israel and the gulf are connected by a land bridge which really is the middle of the world and there was a division there which was artificial, was because of politics or mistrust. It's now open and this is going to cause huge business.
Jonathan Medved: (09:11)
I was on CNBC last week. I described it as a $10 billion near-term opportunity. That was before the three governments, US, UAE and Israel just announced a $3 billion fund. So somebody smart, who I know, said, "Medved, you missed it, you missed a zero. It's more like $100 million opportunity." What's interest is the rest of the world is playing a role and I was on a call last week with a group of Japanese businessmen. All they wanted to talk about were these accords and what do they mean for world trade. So it really is one of these things which is much needed good news in today's difficult environment and really going to change things in a big way.
Anthony Scaramucci: (09:59)
The decision to come to the SALT conference, so I mean you sort of made history coming to the SALT conference in Abu Dhabi. Correct me if I'm wrong, but I think you were the first Israeli business person to speak at a large event in the United Arab Emirates. Is that true?
Jonathan Medved: (10:16)
That is completely true and thanks to you.
Anthony Scaramucci: (10:20)
I appreciate that. I'm not looking for the credit for it but I appreciate you accepting our invitation but what went into that for you?
Jonathan Medved: (10:31)
Look, it was a dream come true. I've been doing business in the gulf sort of under the radar for 12 years already. In 2008, I had a startup called Vringo, which was in the mobile content video sharing business and our first big customer was a UAE operator called Etisalat and we established really great business with them. So good, that we took our company public in 2010 and then as we were filing our S1, the SEC said, "Why are you leaving out the stuff about Etisalat in your prospectus." And I said, "Well, for obvious reasons, I don't want to get them in trouble. We're from Israel. These connections are sort of quiet." I think the New York Times called it the worst kept secret in the Middle East, the connections between Israel and the UAE before the normalization, but the SEC said, "Sorry, buddy, you got to disclose it." And what was amazing was how cool our partners were in the gulf.
Jonathan Medved: (11:36)
So, I've seen this going on below the surface and I just felt back in 2019 when you invited me that things were right for a change. It was not just that your conference was being sponsored by Mubadala and serious people down there but they were ready to hear about Israel. They were ready to talk openly and this was already, I think, a signaling of the winds of change afoot back a year ago.
Anthony Scaramucci: (12:07)
All right, so let's segue. I mean all that is fantastic and obviously one of the goals of the SALT conference was to create those types of synergies and I always tell people, I want people to have opportunities to meet people that can help them with their business. Hopefully, we can learn something from each other and lastly, and this was something I said to all the guys at Mubadala and ADGM, I'm there to have fun. Other people want to be boring and dry, I'm sorry. I grew up on Long Island, that's not what we're about, okay? So I'm there to have fun and so hopefully it was a combination of those things.
Anthony Scaramucci: (12:45)
Let's talk about Our Crowd for a second. What are we doing at Our Crowd? Why is it called Our Crowd? I think that's a fascinating connection into your business plan. Explain your business plan to people. Explain where you want to go directionally with the business.
Jonathan Medved: (13:00)
So, look, the idea is that venture capital should be in everybody's portfolio. The problem is it's not only not present in 99% of accredited investors in America, they estimate about 14 million accredited households in America and less than 1% have a venture capital commitment, which means a lot of people are simply sitting on the sidelines. Now, that didn't really matter 30 and 40 years ago when people went public early. Companies like Microsoft and Amazon and others went public at sub-billion dollar valuations. You held onto these things for 20, 30 years like the way that people like Warren Buffet recommend, you made 500, 1000 times your money. That's great.
Jonathan Medved: (13:49)
Today, these private companies stay private much longer. When they finally go public, most of the money has been made by smart investors in the private markets and those are venture capitalists and private equity people who are doing growth and the reality is that it's a shame, and it's really hard to watch this sort of inequality, this lack of democratization. Jay Clayton at the SEC has been talking about this quite insistently that given the fact that we've reduced the number of public listings by half. In other words, companies simply are not now ... We have the [inaudible 00:14:29] phenomenon and whatnot but still companies are not going public the way they used to.
Jonathan Medved: (14:34)
You've got to give some kind of a chance for everybody else to get in but it's not just, by the way, the individual high net worth and investor of the family office, it's the institution. I mean most institutions look at Yale University with envy. The Yale endowment now is targeting, I think, it's 23% of their endowment in VC this year. That's extraordinary. So I don't know how many of our listeners now are institutions, do a gut check, guys. Ask yourselves how much of your corpus is committed to VC and I'll be shocked if a bunch of them can get to 2% or 3%. It's simply too hard.
Jonathan Medved: (15:17)
The venture funds are too small. It's too esoteric. You've got to be sort of a known guy out in the valley and so that's why we set up Our Crowd. The first way we solved the problem was to provide access to the world's second Silicon Valley, which is Israel. So, a big part of our growth story has been the growth in Israel over the last decade. When we started back in 2013, there was about $2 billion being invested annually in Israeli venture capital backed companies. This year, it'll be over $10 billion. So there's been a four-fold growth, which is extraordinary for an ecosystem over this period of time and we've got now 60,000 accredited investors and close to 500 institutions and family offices who are now on our platform and accessing our investments every week. We're doing about 100 deals a year where you can pick your own deal or you can pick a fund and we have a family of 22 funds at the moment.
Anthony Scaramucci: (16:23)
So, first of all, congratulations on all that. It's fantastic. We'll talk about your pandemic fund in a second but I want to ask you something that is about 10 years ago, Dan Senor, who's a friend of mine, he wrote a book called Start-up Nation. When I visited Tel Aviv, I think, in 2015, I had an opportunity to visit some of the incubation venture capital laboratories, some of the things that Israelis were working on related to cyber security, cyber theft, protection of people's digital assets, et cetera. For people on this Zoom call that don't know a lot about Israel and a lot about what's going on in venture capital there, I was told, and I'm assuming it's still true, that there are more venture capital investments being made in Israel or from Israel than all of Western Europe. I'm assuming that's still true and if it is, tell us about the progress that the Israelis are making in the world of venture capital.
Jonathan Medved: (17:26)
So, it's roughly true. It depends on whether you're counting the UK or not or if you stop in Germany and go farther east but the reality is that there are about 7000 Israeli venture backed companies. There are hundreds of venture funds. All of the major venture investors from Silicon Valley put money into the Israeli ecosystem and what makes it unique is that $10 billion I referred to, about 90% comes from overseas. So while there are significant capital pools in Israel, most of this is people literally in the past coming physically to make those investments, today doing it all on Zoom. We're up, by the way, this year in Israel from $8 billion to $10 billion in the time of the COVID pandemic, which is unreal.
Jonathan Medved: (18:15)
What makes Israel so interesting is a couple of things. Number one, the big source of this technology other than sort of a mindset and a culture which asks a lot of questions, which breaks a lot of rules, which dreams a lot, I've got a good friend [inaudible 00:18:32] from Intel, says the way to motivate an Israeli R&D team is tell them that what they're trying to do is that it's impossible. I mean that's probably the most important part of this phenomenon but on top of it, you have about 400 multinational corporations who are located in Israel, doing R&D and increasingly providing exit to our companies.
Jonathan Medved: (18:54)
You have three trade agreements with Europe, increasing ties with Asia and this unbelievably core relationship with the US and a very strong sort of cultural and technology affinity with Silicon Valley where there are probably about 100,000 Israeli expats so deeply embedded in the American tech ecosystem that some of these M&A transactions where a big American tech company buying an Israeli company, they're negotiating in Hebrew because the guy working for Google, Facebook, whatever in the valley is speaking Hebrew to his cousin or his own brother-in-law or whatever it is back in Tel Aviv.
Jonathan Medved: (19:37)
The ecosystem in Israel is very broadly distributed according to sectors and you'll see everything from cyber security to food tech, Ag tech, the cloud, ecommerce, mobility now, drones, you name it and what's really interesting is we're starting to scale companies up. It used to be that we would sell them, I think, on the cheap and for a couple of hundred million dollars and call it a day. Today, if you're not selling your company as a billion dollar plus exit, you're not making the press and it turns out that Israel now has between 40 and 50 unicorns, that is private companies that are now worth a billion dollars. The big exits were Mobileye in the mobility area to Intel for 15 billion and a bunch of great stuff going on including in our platform.
Jonathan Medved: (20:32)
We have several that ... We just go a company called Lemonade, [inaudible 00:20:38] company went public with probably the best debut of an IPO this year in New York and that's an Israeli company that went three years to $3 billion in value very, very quickly.
Anthony Scaramucci: (20:54)
And a friend of mine, who you may know, Michael Oren, who obviously is a similar guy-
Jonathan Medved: (21:01)
I went to college with his ex-wife and by the way, Dan Senor and I go way, way back.
Anthony Scaramucci: (21:07)
We don't have to bring up ex-wives on the Zoom call. I mean come on. I mean Jon hit the ... You have to have a five-minute ... You have a five-second delay when [inaudible 00:21:15] can't bring up the ex-wives on the Zoom call, okay? One of the stage lights is going to come down and hit you in the head.
Jonathan Medved: (21:22)
I love Micheal. Michael's a regular guest of mine.
Anthony Scaramucci: (21:27)
But I'm just saying, Jesus. I was coming up with a really good question and then you bring up the ex-wife, the poor guy, right? All right, and the poor woman. All right, but anyway, he wrote a book a few years back, maybe 10 or 12 years ago called Power, Faith and Fantasy. I don't know if you've read the book-
Jonathan Medved: (21:42)
Yes.
Anthony Scaramucci: (21:42)
... but it talked about where things are in the Middle East, where they are for Israel, what America's relationship is like for Israel. Where do you see America's relationship with Israel today and where would you like it to be over the next 5 or 10 years?
Jonathan Medved: (21:59)
Well, I think that the American/Israel relationship has never been better and yet, it's not a question of one party or one administration, it's always been that way and really from the time of Harry Truman, who, god bless him, recognized Israel at a moment when it wasn't even sure that we would survive, that we were being attacked on all sides. It was an experiment and Harry Truman said this is the right thing to do and recognized the new Jewish state.
Jonathan Medved: (22:31)
Since then, our relationship with the US has been sort of bedrock and it's not just based on defense needs or common intelligence sharing but it's about values, about the fact that we're both democracies, the fact that we're both about a liberal outlook on life, about capitalism, about creativity and it really runs the gamut with culture and religion and families and the American/Israel relationship is unbelievable. Where it's going to go is continue to be driving shared economic benefit and what's remarkable is how many big American corporations are now taking advantage of Israel a sort of their idea factory.
Jonathan Medved: (23:19)
Israel is really good at ideation, creating new ideas out of nothing and whether it's the tech companies or even companies like John Deer or big automotive companies, they all realize that they need to be in Israel. So that's why there're 400 multinations, mostly American companies, who are there. But what makes Israel so interesting today is that these set of special relationships are really now spreading around the world. So, Israel is trying to dance at two weddings at the same time, increasing relationship with Asia, in particular with Japan and Korea and China, Singapore has been a longterm friend. Israel's biggest trading partner continues to be Europe which is in our backyard and despite some political ups and downs in that relationship, the trade business is very significant.
Jonathan Medved: (24:15)
But what Israel and America share is this entrepreneurship sort of leadership in the world and there really is nowhere else for startup investing in companies like Silicon Valley and like Israel. They are both unique in terms of the way the world works.
Anthony Scaramucci: (24:35)
Excuse me, before I turn it over to John, Jonathan, let me ask you about your pandemic fund. You just started it. It's a pandemic ... It's called the Pandemic Innovation Fund. It's a slightly different business idea from your other aspects of your business model. Tell us about that. Tell us how it's going. Tell us what you'd like to see for it over the next three to five years.
Jonathan Medved: (24:59)
So, look, I think that what's remarkable about this very special and challenging time we're living in is sort of the tale of two cities aspect to it because there are a lot of people who are suffering. There's a lot of terrible unemployment. Many traditional businesses have been belly punched and are reeling but on the other hand, the digital economy is booming and you can see it in the price of the FANG stocks. You can see it in what's going on with startups but if you are empowering everything from work from home or if you're empowering telemedicine, if you're empowering diagnostic testing or remote education, your business is on fire, doing really, really well.
Jonathan Medved: (25:47)
So, we decided to set up a fund that would focus on both the medical aspects of the pandemic that frankly had been under invested, whether it's diagnostic testing or tracking and tracing or vaccines or prevention. We were committed to that but also investing what we call the new normal. So we put together this relatively modest $100 million fund and we're still early days in putting it together and raising it but we're investing in a bunch of really interesting companies including one of the leading candidates in Israel for the vaccine. This one happens to be an oral vaccine which is very important given some of the issues in storage and logistics to get some of the more esoteric vaccines out to the world.
Jonathan Medved: (26:38)
If you look at what happened with polio, the first vaccine was a shot and then the Sabin vaccine, which was oral, was the one that really took the day. So we're hoping that that'll be ... That company's called MigVax. We're hoping that will be a winner and a whole bunch of other companies that are doing everything from robotic process automation to distance learning, cyber security which is becoming a huge part of the work from home conundrum [inaudible 00:27:11].
Anthony Scaramucci: (27:12)
All right, well, with that, I'm going to turn it over to John D'Arcy. We've got a ton of audience participation here, Jonathan. Congratulations on everything that you're doing and it's an awesome story and I hope that SkyBridge and SALT and all of us can be together soon and help grow that story.
Jonathan Medved: (27:30)
Thank you, Anthony.
John Darsie: (27:32)
Yeah, Jonathan, we have a lot of audience questions, so looking forward to getting into these. The first one, going back to the Our Crowd platform, you talk about how your goal is really to democratize access to the type of venture capital opportunities that typically are only available to large investors with high minimums. What is the minimum for an investor on Our Crowd and what's the process like for them to be onboarded, to verify their accreditation, for them to ultimately invest in deals on your platform.
Jonathan Medved: (27:59)
It's great. So, first of all, it's an accredited investor platform. So you've got to meet those criteria. In the US, where I imagine most of your listeners are, this is a million dollar net worth test outside of your primary dwelling or a $200,000 annual income test and again, there are about 14 million households that meet that. We have a pretty frictionless onboarding process where we use a third party vendor who qualifies that. We use something called 506(c) which is a new part of the Reg D regulations that allow us to actually do public solicitation. So, in order to do that, we do have to get more than just a self attestation to your credited status. We do that pretty quickly but it's pretty much about a one-day process and you're up and running and you're on the platform. And again, we have about 60,000 registered investors at the moment. Like it to be 600 or 6 million someday or 60 million but we'll get there.
Jonathan Medved: (29:06)
But once you're on, then every week, you're going to see several opportunities and you're going to get this information by email and be invited to go to our website either through your mobile phone or through your desktop. We actually post a lot of information about the company and the investment opportunity including the company's debt as well as an analysis written by our team because we put our own money in as any GP does. I mean we're not a crowdfunding platform in the traditional sense where companies are paying us to slot them and then we're getting a commission from the companies. We're principle investors. We're venture capitalists. So we're putting GP money in. Each of the investments is approved by our investment committee. It's been fully diligenced and then once we do that, we share that information with the crowd.
Jonathan Medved: (30:02)
We actually lead the majority of our investments. We sit on company boards and then we open these investments up to the crowd. The minimum investment in a single company deal is $10,000 per deal and the minimum investment in a venture fund is 50,000. So it's quite accessible and quite democratic. I mean let's face it, most of the venture funds you want to be in, their minimums are like $5 million. So to bring it down to 50,000, we think is going to change the way that access is done and I noticed there was another question that someone had asked about benchmarking. We're very, very obsessed with performance and we are benchmarking ourselves against Cambridge and all the other metrics that are watching people's performance.
Jonathan Medved: (30:53)
We have good performance for some of our portfolio funds. We have a fund called OC50, which actually takes your $50,000 investment and then divides it into 50 individual bite sizes of approximately $1000 and so you get a very hyper diversified portfolio of venture companies. Very, very interesting in it's construction. All of these companies that we're doing diligence on on the platform, in any event. And we're now getting ready to launch series four of that fund. It's an evergreen fund that we continually make available on our platform and performance has been running, depending upon which iteration, in the healthy double digit IRR net after fees. So we're quite happy with that.
John Darsie: (31:45)
In terms of companies that are on your platform, in terms of the deal pipeline, is there a geographic focus? Are you focused on Israeli or Jewish entrepreneurs or is it a global fund? What is the makeup geographically of the types of companies you have on the platform?
Jonathan Medved: (31:59)
There's absolutely no religious or ethnic focus at all. There is a slight geographic preference simply because we live in Israel, we're headquartered there. We now have 13 offices around the world ranging from Sydney, Australia to Hong Kong to Singapore to London to Madrid, down in Sao Paulo, Brazil and our newest, of course, is in Abu Dhabi. So thanks to you guys. And the reality is that we ... Today, about 54% of our deal flow is in Israel and about 46% outside of Israel. So we're approaching parity between Israeli deals and external deals, which I think is a good thing.
Jonathan Medved: (32:51)
So, on the one hand, if you're seeking a great source of Israeli deals, please come to Our Crowd but we're offering deals elsewhere. So, as you mentioned in your very kind introductory comments, we were investors in JUMP Bikes, people who have seen those red bikes, bought by Uber. We were investors in Beyond Meat, which was one of the best IPOs, really, of the last decade before it went public. And these are ... We were investors up in a Canadian company called Wave. It was bought by H&R Block for 440 million, and we're continuing to make ... We just led a big round at a very nother interesting food tech company. I can't say it actually now because they're about to announce it soon, so I've got to watch my tongue but the reality is we're about half/half in terms of deals in Israel and outside of Israel.
Jonathan Medved: (33:43)
Those outside of Israel are by and large US deals, although we have some deals in China and Europe and we're really seeking to be a global platform and as we get bigger, we'll do more and more outside of Israel.
John Darsie: (33:56)
So, you talked about how you've been quietly doing business a little bit in the gulf even prior to the normalization of relations in Israel but you were one of the first, I think you were the first Israeli businessman to sign an MOU with an Emirate firm after the Abraham Accords. What has surprised you about the opportunities and the entrepreneurial spirit that exists in the gulf and what type of opportunities do you see for commercial collaboration between Israel and the UAE going forward and Bahrain for that matter?
Jonathan Medved: (34:25)
I think the opportunities are great. First of all, there was a question there of Bahrain as well as the UAE, because the UAE's got a GDP of about more than 10x that of Bahrain, they get lost sometimes, but I think there's great opportunity in Bahrain. There are a whole series, I think, there's now 12 weekly flights going to go into Bahrain from Israel. So we don't want to leave them out of the equation and we're very committed to that. Our regional office for the GCC, if you will, will be in Abu Dhabi but we'll probably be building in long run, sort of satellites in other cities and other regions there as we grow it.
Jonathan Medved: (35:09)
Look, the opportunity is essentially for three different things. It's for investment whereby both Israelis are going to be investing there and we're getting ready to announce our first investment in a UAE company, which we're very excited about. People from the region are going to be investing in Israel and we've got ... We just announced $100 million framework investment deal with the Al Naboodah Group. That's number one is a tremendous sort of bilateral investment.
Jonathan Medved: (35:42)
Number two is going to be creating joint ventures whereby it's not just about taking Israeli products and moving them into the gulf or gulf products and moving them to Israel, but it's going to be about creating new things together. I was sitting on a porch outdoors last week with a group of 20 and 30-something sort of next gen Emirati business people who were the sons of ... And one of them pointed to this huge building in the distance and said, "That's my dad's building," and he said, "I want to build something bigger." And I said, "Well, where is the building going to be?" He goes, "I don't want to build the building. I want to build the startup." And these guys were all interested in AI and food tech and mobility and logistics and they were completely up-to-speed with what's going on in both Israel and in Silicon Valley and I think that when you put these two together, it's going to be fireworks.
Jonathan Medved: (36:45)
The third area which we're looking at is actually doing research and development over there because there are generous government benefits and it's easier, in some cases, to actually recruit people from abroad to come live in the Emirates as expats because today, let's face it, in Israel, we're growing our ecosystem but we're short, at the moment, about 20,000 engineers for our companies and that gap is growing. So we really need to do R&D everywhere. We've got teams working in the Ukraine and Hong Kong. People are working for Israeli companies. They are becoming sort of like baby multinationals and I am certain that there's going to be a lot of really interesting R&D done in that area too.
Jonathan Medved: (37:37)
So, the opportunities are huge. It's going to be broad. It's going to be everything from property technology to clean energy to logistics to Ag tech, to food tech because they're really into food security, cyber security, oil and gas, you name it. There's going to be a lot going on and I think we haven't even seen the beginning of this.
John Darsie: (38:03)
Yeah, just to echo that, we obviously have some clients in the region on the SkyBridge side and we have friends in the region in Saudi and the UAE and Bahrain but we were blown away as we dove deeper into that ecosystem as a result of SALT about the entrepreneurial vigor that exists among the next generation, especially in the UAE and in the region as a whole. So it's a very exciting time.
John Darsie: (38:25)
So, we have another audience question about how do you source deals for the platform, especially ones that are highly competitive? How do you get into those deals and how do you source them?
Jonathan Medved: (38:35)
So, first of all, we source them, by and large, through our network of investors because once people are investors on the platform, they trust us, they see how we work and they want to bring us into the deals they're looking at. They want our opinion and we're quite happy to share that. That's probably our biggest source. Perhaps our best source of deal flow is from our entrepreneurial core, the CEOs of our companies, the 200-plus, they bring their friends because they work with us because let's face it, today, the way you get into a highly competitive deal is not to outbid somebody. That's so last century. Today, the way you get into a good deal is by outbidding somebody on the value that you can add.
Jonathan Medved: (39:22)
In other words, you've got to be able to convince the smart entrepreneur, the smart CEO that you're not just going to write them a check and be there in the future to write more checks, which is a big part of this job, to continue to sustain these companies going forward, but that you can provide strategic introductions to partners, that you can help recruit key members of his management team, that you can get them in the media, that you can introduce them to other investors. I mean this is really what this is about.
Jonathan Medved: (39:54)
It's not like about picking a public stock. We're not deal pickers. We are company builders and we bring to this a remarkable amount of added value because of the crowd. Because we have 60,000 people on our platform and hundreds of family offices and multinationals and whatnot, we're able to go to an entrepreneur whether it's in Abu Dhabi or in Israel or even in Silicon Valley and say how would you like this international network to come work with you and that becomes, usually, a very compelling part of the value proposition. We urge them to call our other CEOs and ask what's it like working with these guys? Do they really deliver? And smart entrepreneurs do their diligence on the investor the way that investors do their diligence on the company and that's how you get into the good deals.
John Darsie: (40:48)
So, before we let you go, I want to finish on another followup question about your Pandemic Innovation Fund and about the pandemic in general. So as some of you may have seen, we put out a press release yesterday. We're going to be doing a series of SALT Talks, partnering with Our Crowd, which we're very excited about, talking about all the innovation that's taking place as a result of the pandemic whether it be new trends that are emerging or the acceleration of existing trends. One of the interesting things, I think, about your Pandemic Innovation Fund, and it's not just first derivative effects of the pandemic. It's not just okay, we're going to have remote work, so we're going to invest in Zoom and Skype and Microsoft Teams. There's a lot of second and third derivative investments in that fund that I think are fascinating. Could you talk about some of those second or third derivative effects and the investments that you're making as a result of those effects?
Jonathan Medved: (41:36)
Sure. So look, I think that when you start looking at, for example, food tech, which you might not think that food tech has much to do with the whole pandemic story but as you know, by the way, during the pandemic, there were terrible breakouts that happened in ... Yeah, there's a dog-
John Darsie: (42:01)
That's part of the Pandemic Innovation Series. [inaudible 00:42:04] dogs barking in the background.
Jonathan Medved: (42:06)
Yeah, a bark suppression algorithm which we can sell to ...
John Darsie: (42:12)
I need a bark suppression algorithm and don't worry about it. People appreciate the dog barking in the background.
Jonathan Medved: (42:19)
It's actually the most effective security system known to man were dogs.
John Darsie: (42:24)
Absolutely.
Jonathan Medved: (42:25)
But in any event, there were a lot of meat packing companies that really got terribly whacked and there were all kinds of issues about food security as a result of the pandemic. People went attacking these food shelves and so there are companies where we have money invested like Ripple, which is not the cryptocurrency but the plant based milk, where all of a sudden, their sales started to take off because of the fact that they have a long shelf life and people didn't want to have to go keep running back to the market and they said wait, this stuff lasts for a month or even longer in my refrigerator? I'm going to get that.
Jonathan Medved: (43:10)
We have another company called Tovala, which basically makes a smart oven that takes a pre-packaged piece of food which is shipped to you. It's, by the way, fresh and it cooks it for you. Their sales went through the roof as a result of the pandemic. We have a company called Trellis which helps big food companies do optimization of their supply chain so that they can save 15% and so I'm just drilling down here at various ... I'll give you another one. We have a company called Tevel, which used drones to pick fruits and it turns out that there's been tremendous shortages of farm hands and for foreign workers during the pandemic to get ... So just fruits rotting on the trees. So these drones do that.
Jonathan Medved: (44:04)
So there's four examples in just one narrow segment of companies that most people would not think of as having been impacted by the pandemic. So this new normal we're living in, we haven't even begun to understand how deeply reality is changing and we all think ... We all understand Zoom now and we're amazed that Zoom's market cap keeps on seesawing with IBM but there's a lot more beyond Zoom. I'll give you one more example in the medical area which is that we had a pandemic innovation conference online where we had the head of Johns Hopkins Health on and he predicted that 30% of hospital visits are simply going to move to telemedicine and then we had another webinar with the head of one of Israel's leading hospitals, Sheba Innovation Group. I asked him what he thought of that prediction, because it's pretty astounding when you think about it, 30% of hospital procedures are now ... Or visits are now going to go online?
Jonathan Medved: (45:10)
That's a huge market opportunity and he said, "Way underestimated. Try 70%." So, you look and you start thinking, has the smart investor realized how big this shift, disruption is going to be in the delivery of medical services and digital health, of telemedicine, and I don't think most people have really thought this through yet and that's why you need things like our Pandemic Innovation Fund, which are focusing on that.
John Darsie: (45:42)
Well, John, thanks so much for joining us. Again, we are so excited to do the SALT Talk series in partnership with Our Crowd. It's a fascinating platform and we share so many of the same values in terms of democratizing access to alternative investments and also plenty of other values as well but thanks so much for joining us this morning. Anthony, you have a final word for Jonathan?
Anthony Scaramucci: (46:03)
Listen, we got to get back together. That's what I'm looking for, okay? I'm looking for some one-on-ones, face-to-face, that's what I'm looking for.
Jonathan Medved: (46:12)
And some hugs.
Anthony Scaramucci: (46:14)
Yeah, yeah. I got to tell you, there's a guy in his basement, he's beating up on the guy that's not in his basement and I'm in my basement too, Jon. So we're sitting there right now. But I mean, maybe the basement is after all ... Maybe the basement is the best strategy after all, I don't know. We'll have to see.
John Darsie: (46:32)
It's been a long day.
Anthony Scaramucci: (46:33)
All right, you do well.
Jonathan Medved: (46:33)
A lot of great companies set up in basements and garages, that's for sure.
Anthony Scaramucci: (46:37)
Amen. All right, well, you be well, Jonathan.
Jonathan Medved: (46:40)
Thank you, guys. See you soon.