Impact fund Bridges Israel has made its second investment in an Israeli company, backing a Series A for drip irrigation startup NDrip.
Based in Moshav Bnei Atarot and founded in 2015 by professor and former director of the Israeli Water Authority, Uri Shani, along with Ariel Halperin, and Ran Ben-Or, NDrip has developed a novel drip irrigation system that can replace flood irrigation methods with drip irrigation for large scale farming operations.
Today, 85 percent of the world’s cultivated fields use flood irrigation, whereby water is brought to the field via ditches or pipes. Far outdated, this system is wasteful on multiple levels, resulting in upwards of 50 percent of the water being lost to evaporation or runoff into uncultivated land, and the carrying off of costly and much needed fertilizer, depriving crops and polluting waterways.
Furthermore, current drip irrigation systems that are in use are costly to operate – requiring a power source to pump the water to the field and filters to keep pipes from clogging. Because of these barriers, only 3 percent of agricultural land is watered through drip irrigation, according to Ran Grodecki, managing partner, Bridges Israel.
What sets NDrip apart, and what makes its technology so much more cost effective, is its use of gravity, eliminating the need for power, and its ability to work without filters.
“This is a revolutionary new irrigation system that can target the global market and lead to significant savings in water,” Grodecki told The Times of Israel. “NDrip can expand precision irrigation to new and large crops and markets. It has the potential to generate significant global impact, socially and environmentally, helping to solve two major global challenges – the growing water shortage and the increase in food insecurity.”
Eye on Israel
With the belief that good social change can be realized while also achieving financial returns, Gal Hayut (formerly of Apax Partners), Sandrine Montsma, and Ran Grodecki, launched the $75 million Bridges Israel Fund with the goal of making investments that would increase sustainability, benefit the disadvantaged, and boost education, health, and standards of living. Under this mandate, the fund is targeting tech companies that have the potential for worldwide positive change.
In March of this year the fund announced it was in the process of raising $50 million from Discount Capital, Psagot Investment House Ltd., and other private Israeli and overseas investors.
Impact investing is rapidly gaining credibility and investor backing, with 229 global impact investors managing $228 billion in assets, according to the Global Impact Investing Network (GIIN). Indeed, 97 percent of investors responded that impact performance through such investments “met or exceeded their expectations”, while 91 percent of impact investors responded the same for financial performance.
Market and geography-wise, Israel is an opportune place to start. Israel has made a name for itself as a global leader in the advancement of ag and food tech. The country is ranked second out of 138 countries (outranked only by Switzerland) by the World Economic Forum’s Innovation Ranking, due in great part to a combination of distinct factors:
Land: The semi-arid nature of Israel’s landscape and the constraints placed on its agricultural sector drive a need for innovation. Furthermore, the density of the country’s geography creates a close-knit network of innovative companies.
People: Israel’s history of being a country built by immigration has led to an open, entrepreneurial culture where the goal is innovation; while the influx of people of vastly different economic backgrounds has led to a multidisciplinary approach to problem solving. The cross-field aspect of the country’s expertise – from military, to gaming, to pharma adds a depth to the pool of experience that can be pulled from for R&D initiatives.
Infrastructure: The Israeli government has supports in place, while academic research is widespread. Meanwhile, the country’s military teaches its young people how to build, problem-solve, and meet failure with the understanding that knowledge has been gained.
This environment has led to an investor landscape conducive to all investors from generalists to focused agtech, impact, global, and corporate investors.
So positioned, NDrip plans to use the capital from this Series A to support its efforts to lift production capacity, advance its footprint in some of the world’s key markets, raise the quality of its products, and develop irrigation solutions that can best meet demand.
Lynda Kiernan