India’s Tata makes 1st big Israeli investment in TAU

Indian conglomerate to invest $5 million in Tel Aviv University's technology transfer company Ramot.

Ramot CEO Shlomo Nimrodi 370 (photo credit: Courtesy Ramot)
Ramot CEO Shlomo Nimrodi 370
(photo credit: Courtesy Ramot)
India’s largest conglomerate, Tata Industries, announced its first major investment in Israel Monday in a fund run by Tel Aviv University’s (TAU) technology transfer company Ramot.
Tata has committed $5 million of the $20m. planned for Ramot’s Technology Innovation Momentum fund, which will invest in commercializable university research. TAU says its the first such investment worldwide.
“I’m not aware of any other academic institution that has received an investment from a conglomerate – not a donation, but an investment,” says Giora Yaron, chairman of Ramot’s board. “Their experts will be working with our scientists to guide the science to develop innovative products.”
The investment serves a dual purpose for Tata. On the one hand, it will give the company the option to commercialize breakthroughs developed through the fund at TAU, turning the university into a sort of R&D project incubator for the company.
But perhaps more importantly, Tata is looking to the university as a microcosm of Israeli research and innovation in general.
“This is our attempt to scout out the horizon and engage more deeply and broadly with Israel,” says K.
R. S. Jamwal, executive director of Tata Industries, which had annual revenues of over $100 billion in 2012, over half of them from international operations and subsidiaries such as the UK’s Jaguar Land Rover.
“Rather than just scouting around and having conversations, it allows us to show our commitment and show that we’re keenly interested to do more,” he says.
“We’ve found this structure to be very innovative, and at the moment we have not seen any other university offering such a an interesting structure,” says Jamwal.
Tata says it was drawn to the university’s interdisciplinary capabilities and track record of developing marketable technologies, such as datastorage algorithms used in SanDisk flash-memory drives and the pharmacological breakthroughs used in Blistex’s Dentyl mouthwash.
From Ramot’s perspective, the partnership is an opportunity to add to the NIS 70m. it brings in each year, which can can be reinvested in the university.
“The potential is in the hundreds of millions of dollars,” says Ramot CEO Shlomo Nimrodi, who believes the fund can bridge the distance between academic work in the ivory tower and marketable innovation. For every dollar earned on royalties, 20 cents will be reinvested in the research labs and 40 cents will go to the scientists themselves, providing an inviting incentive for the academics.
“The problem in most academic institutions is getting the innovation from step 1 to step 10,” he says. “The fact that we have Tata in the mix increases the likelihood that two things will happen: one, we will develop the things that the market needs and, two, that there’s an exit partner out there.”
Not only that, he says, but the fact that the research is happening within a university setting means that, unlike in many corporate R&D labs, projects with longer time horizons will have a space to develop.
That fits into Tata’s overall strategy of investing in research and innovation as their main source of growth in the coming years.
“The Tata group is looking to leverage innovation and research and development as a key area of focus and a source of competitive advantage going forward,” says Jamwal.
Looking to the future, Yaron thinks that the cooperation between academia in business can encourage the entire area’s business development.
“Tel Aviv University can do for Tel Aviv what Stanford did for Silicon Valley,” he says. “If we do it right, we will end up driving a revolution that will change the standard of living in Israel.”