Driving Israeli Mobility Tech to German Success

From right to left: David Order, Noa Yang,  Daria Vexler, Benny Prujan, Hemdat Sagi, Maayan Ekstein, Clara Guiga
Photo by: Sophie Kerchnawe, VW Group

Israel’s technological excellence shines brightest in the automotive sector: of the 7,000 active startups operating in Israel, approximately 700 companies comprise a dedicated auto-tech ecosystem. It comes as no surprise, then, that leading global corporations are drawn to seek innovation in the Start Up Nation. This was precisely the case with Volkswagen Group Konnect and its intensive operations in Tel Aviv.

Konnect, the Volkswagen Group Innovation Hub in Israel, was established in 2018. Its mission is to scout and evaluate Israeli automotive and mobility technologies with the goal of integrating them into the Group’s vehicles and manufacturing facilities.

Hemdat Sagi, Konnect’s Managing Director. Photo: Elad Malka

“We’re here to identify and promote promising new technologies across various auto-tech fields, based on the specific needs and use cases of Group’s 10 brands, including Audi, Škoda, Seat, and others”, explains Hemdat Sagi, Konnect’s Managing Director. “These needs include mobility, autonomous driving, connectivity, AI, sensors, and even sustainability and climate solutions. Given Israel’s rich background in software, computer vision, AI and semiconductor development, the local ecosystem can address these needs in numerous ways.”

Hemdat Sagi, Konnect’s Managing Director, is also a co-founder of Konnect, which operates as a nine-person team. In addition to her 15 years of experience in senior strategic and biz-dev roles, she served from 2012 to 2016 as Commercial Attaché and Head of the Economic  Department at the Israeli Embassy in Berlin. Konnect was established based on a recognized need – to identify and integrate innovations that were created externally..

“This stemmed from the understanding that not everything can be developed in-house,” explains Sagi. “Indeed, after we launched our hub, other automotive companies were pursuing the same approach.”

 How quickly can you react to changes in the Auto-tech market?

Sagi: “We operate as an independent Israeli organization, hence we can act very quickly. This is most evident in the initial phase: instead of a long and slow corporate processes, we evaluate a startup technology much faster; our technology validation can be completed within three months. We use our own budget resources to fund projects rather than wait for long corporate internal approvals. We’ve learned how to be agile, proactive, and fast, just like a startup.”

Konnect functions as a testing and validation hub for mobility technologies. The team executes dozens of projects and proofs of concept per year with Israeli and global startups on their path to global, long-term collaborations (see box). “It’s a long-term journey – and we initiate and steer the projects while keeping them compatible with industry standards,” explains Sagi.

Do you take equity in the companies you choose to work with?

“We do not. We are not an investor but a potential customer. It’s more challenging for the startups but increases their validation and ability to raise funds, and many startups actively seek to partner with us.“

What do you look for in a startup?

“We search for genuine market need: does our Group actually need this solution? If there’s isn’t, we help to re-adjust it or skip it altogether. We have the Konnect Innocar, an Audi Q4 e-tron testing vehicle, which we use to test the startup applications in the car.

“Seed stage startups are too early for us; we require an MVP –  a minimal viable product , that can be tested in our vehicle immediately. We’re looking for Technology Readiness Level (TRL) 4 or 5. However, we’re still eager to meet younger startups as well.”

Alongside Konnect’s activities, Volkswagen Group established Leitmotif, a $300M investment fund, pursuing decarbonization and sustainability investments. Leitmotif has already invested in over a dozen startups worldwide, including companies focused on decarbonization, nuclear fusion, circular economy and battery development.

Other VolksWagen Group subsidiaries and brands are also actively seeking opportunities in Israel. One of them is Scania, whose VC fund invests in early stage energy and sustainability startups (see box). When the fund’s representative arrived in Israel to evaluate companies, Sagi’s team introduced her to various startups, which resulted in Scania investing in 3 local startups.

“We facilitate such partnerships all the time,” says Sagi, “when we run a project or meet an exciting startup, I update other relevant brands within the Group so they can monitor the opportunity. If one startup works with Audi, there should not be a reason why they cannot work with Porsche or Bentely and so on. This creates a transparent and collaborative innovation culture.

Konnect also accepted and hosted already over 20 German volunteers – students who come to Israel to experience high-tech work. They are referred through “New Kibbutz”, an internship program operated by the German-Israeli Chamber of Commerce.

All in all, the close technological and business collaborations facilitated by Konnect make a substantial contribution to strengthening bilateral relations between Germany and Israel.

Gearing Up with Konnect

Konnect projects that evolved into business implementation:

Deployment of Solar Films for VolksWagen California

A Konnect facilitated project: Apollo Power will supply Volkswagen Commercial Vehicles with tens of thousands of solar sheets in a €33 million agreement. The solar films will be deployed in after-market accessories provided for the Volkswagen California Camper.

Autonomous Ride-Pooling and Robotaxi Services with ID. Buzz AD:

A Konnect project manager supports Volkswagen Autonomous Mobility & Transport (ADMT), together with Mobileye and MOIA, in the development of Level 4 autonomous ride-pooling and robotaxi services using the fully electric ID. Buzz AD. The project integrates Mobileye’s Drive™ system to enable safe autonomous operations. Several pilot programs are currently running across Europe and the U.S.

Recycled Textiles Integration in a Golf trunk

Led by Konnect: Re-fresh Global developed demonstrator trunk components for a Volkswagen Group vehicle using recycled textile waste. Together with a Tier-1 supplier, the recycling process and final product are evaluated for automotive use.

Strategic Investment in Battery Technology start up by Scania

A Konnect facilitated project: Addionics, a pioneer in 3D copper foils for electric vehicle batteries, has raised $39 million in funding. Among the investors is Scania, one of the Volkswagen Group brands.

AI-Based Visual Inspection for Panoramic Roof Assembly at Bentely Motors

A Konnect facilitated project: Bentley Motors integrated an automated vision inspection system developed by Inspekto (now Siemens) on its Crewe assembly line to ensure sealant path quality in panoramic roof cell production. The system is currently operational and is being used by Bentley staff in the factory.

Konnect: an ID

Activity: Innovation hub of the VolksWagen Group in Tel Aviv. The team is scouting, evaluating, and integrating pioneering mobility technologies into the Volkswagen Group cars and factories

Address:      Menachem Begin 144, Tel Aviv-Yafo
Website:      www.konnect-vwgroup.com
eMail:           inbox@konnect-vwgroup.com
Linkedin:    www.linkedin.com/company/konnectvw/