The management of MassChallenge, the biggest start-up accelerator in the world, located in Boston, has chosen to launch its 2015 round in Jerusalem. It’s possible that this process will lead to the establishment of a MassChallenge branch in Israel.
Accelerators generally sponsor fewer than ten fledgling companies, but MassChallenge has a different approach. The start-up accelerator, founded in 2008, has supported more than 600 companies to date, which together raised more than $700 million, generated more than $400 million in revenue, and created 5, 000 jobs. The selection process for the prestigious program opens today in three locations: Boston, London, and Jerusalem. “The MassChallenge program was established in 2008, when we discovered that there is a difference between start-ups that create value, and those that don’t. The founders’ vision is to help them do PR for that value, ” explained MassChallenge Israel CEO Amir Eldad in an interview with “Globes.” “We started during the global financial crisis, and we looked at the industry globally.”
Which start-ups interest you?
“We are open to any company, in every sector, even gaming, but we are looking for ‘high-impact.’ A company that want to be a leader in a certain area – cleantech, IT, data storage – and on the condition that there is a vision of leading.”
Do you prefer companies that are planning on an exit, or those that aspire to grow to become large companies?
“We don’t look at that; only success. IPO, sale, growth – these are all successes.”
What sets you apart from other start-up accelerators?
“We have two criteria – we accept only young companies that have raised less than half a million dollars in equity. Last year, out of 1, 600 applications, we accepted only 128.”
The start-ups that are accepted to the program move to Boston for four months, where they receive a workspace, networking, and access to potential investors, as well as legal and professional advice. This range of services is estimated at $10 million. In addition, MassChallenge holds a competition between program participants, and awards a $1.5 million prize to a number of leading companies. The accelerator does not receive ownership shares from the companies.
“We are very interested in what is happening in Israel, because you are an innovation powerhouse, and one of the places with the strongest entrepreneurial eco-systems in the world, ” said MassChallenge founder, partner, and CEO John Harthorne. “The community of entrepreneurs in Israel has many ties to our community in Boston. For a number of years already, Israeli and Jewish entrepreneurs have created great value for the State of Massachusetts. Many Israeli and Jewish entrepreneurs all around the world are excellent partners for any company with global aspirations. And, in any event, there is much less snow in Israel than in Boston, and that is a very significant advantage.”
Jerusalem has seen a blossoming of high-tech of late. According to Jerusalem Development Authority local technology entrepreneurship support program JNext data, in 2014, 100 companies were founded, compared with just 12 new companies two years earlier, and 40 in 2013. In 2014, 47 Jerusalem companies raised $172 million compared with 25 companies that raised $58 million in 2012.
Published by Globes [online], Israel business news – www.globes-online.com