Lotan Levkowitz on unleashing value as an early stage start-up investor

Lotan is an early stage technology investor who has spent the last seven years at Grove Ventures. As General Partner, he currently leads their Industry 4.0 and Cloud Infrastructure investment strategy. He’s also a founder of the Israeli Industrial IoT Forum and II4 Conference, and serves at the boards of a multitude of companies including 3d Signals, RapidAPI, Lumigo, Navina, ActiveFence and BeyondMinds. Lotan holds a Bachelor of Law degree (LL.B.) and a Bachelor of Business Administration degree (BA) from the Hebrew University in Jerusalem.

You’ll be speaking at a 4YFN panel on ‘Deep Tech: Boosting your Innovation Strategy through Science.’ Can you tell us more about this?

I was approached because I’m General Partner at Grove Ventures. We’re an Israeli fund and a lot of our portfolio companies deal with frontier technology. We invest very early on with entrepreneurs here in Israel that are trying to build huge companies. We believe in technology that’s creating new categories based on innovation such as edge computing,  infrastructure of the Cloud and AI, and automation in all these areas. Sometimes, when you buy the right infrastructure, you can witness the next wave of innovation. This is how we ended up investing in these areas. 

The main point I would like to talk about in the panel is about the face of deep technology today. Luckily for us, we’re based in Israel and many of these things are happening around us.

What is your day-to-day like as General Partner for Grove Ventures?

In our daily lives, we meet with people like exceptional entrepreneurs, top executives, huge companies and other investors. Being a very good venture capitalist is about guessing what the world will look like in the future. 

For me, there are four main pillars to what a general partner in a fund does. Firstly, there’s everything related to our investors – raising funds and maintaining relationships and contacts. Another aspect concerns deal-flow and sourcing new companies that might become our future portfolio companies. We always hear amazing stories and great ideas from these entrepreneurs. 

The third one is maintaining relationships with all the ecosystems around us. Meeting other founders and big corporations and understanding markets. And the fourth pillar, which I find the most interesting, is working with our portfolio companies. I’m currently on the board of six companies and I spend a lot of time with the founders helping them build their future companies.

You have special interests in IoT, Digital Health and Infrastructure Software. Why are you passionate about these areas in particular?

I prefer big, fundamental changes in core areas. Cloud infrastructure is one big area that I’m a big believer in. A second area I’m interested in is digital transformation of existing fields, which can be digital health or industrial areas. 

The third one would be new markets, like AI or trust and safety. Trust and safety is the set of business practices whereby an online platform reduces the risk that users will be exposed to harm, fraud, or other behaviors that are outside community guidelines.

These are areas that are being disrupted and that’s what excites me. As the disruption is just beginning—there is a lot of potential to influence these areas.

What is the biggest challenge currently facing the tech transfer industry, and in your opinion, how can it be overcome?

There are many different challenges and things happening at the same time. I think that there is a lot of competition over talent and trying to attract the best people is getting harder. Then also getting the attention of the buyer, because there are so many smart entrepreneurs saying they can solve your biggest challenge – which you didn’t even know you had – and your attention span is limited.

You serve as board member for companies including 3d Signals Lumigo, Navina, ActiveFence and BeyondMinds as well as a board observer at RapidAPI. What inspired you to join so many boards?

Firstly, the people. All these companies are led by amazing people and I’m really lucky to work with them. Secondly, the challenge and the potential. 

They are going to very big markets with huge challenges, and using innovation to correct these markets and try to make them a bit better is the best part. Being a venture capitalist means smart people let you have a seat at their table, at the right places and at the right time.

You’re the founder of the Israeli Industrial IoT Forum and II4 Conference. Could you tell us about them?

When we started Grove Ventures about five or six years ago, we realised that there’s huge value potential in the manufacturing supply chain – what’s being called ‘Industry 4.0’. On one end, there’s a very big market and on the other there are technology companies dealing with innovation. These two ends are not communicating that well because they’re from different spheres and generations. We tried to bridge the gap and realised we could help establish huge companies.

There’s been a ‘digital health boom’ in the Spanish start-up ecosystem, particularly in Barcelona. Could you comment on this growing ecosystem?

At Grove, we’re investing in early stage start-ups in Israel. I think it should stay local at the beginning because you need very close contact, which is very hard to do overseas. Digital health has a lot of value potential but I think that regulation still plays a big role in this area. The challenge would be how to transfer a successful business from the local Spanish or Catalan healthcare ecosystem to other countries. In the past, it was more difficult than in other places because it was heavily regulated.

The intention of The Collider is to help bring start-ups to the market. How would an entrepreneur at a start-up begin this process?

Get obsessed with customer needs. Sometimes entrepreneurs say, ‘I have to wait before I have a product before I become big.’ I don’t think that that’s the case. I think that from day one, just based on your charisma and your ideas, you can get attention. After the customers then tell you what they need, you can start to think about developing the right product. Return to the customer, validate your product, and only then do you start to build your company.

I intentionally used the word ‘obsessed,’ because before you go to sleep, you need to think about your customers. That’s something that should be in the back of your head all the time as a founder.