OurCrowd sets up $100 million fund to ride the wave of artificial-intelligence disruption

Jerusalem-based equity crowdfunding platform OurCrowd is launching a new $100 million fund to invest in early-stage start-ups focused on artificial intelligence, deep learning, the Internet of Things – household smart devices – robotics and digital manufacturing.

Given that AI is likely to transform multiple industries, OurCrowd partners seek to invest in Israeli start-ups working in the field and jump on the lucrative bandwagon.

“Cognitive AI is unstoppable and likely create the biggest disruption, as well as the largest transfer of wealth during this period of transformation,” said Avi Reichental, an OurCrowd general partner who will be co-leading the fund. “We have come to understand, working primarily with early-stage Israeli companies, the power of the convergence of AI with ubiquitous connectivity, with infinite computing power in the cloud, with censoring and IOT, with 3-D printing and robotics. That very convergence will inevitably disrupt every sector and every segment of the industry and create new category leaders.”

Already, cognitive AI and robotics have transformed factories, changing how companies design and manufacture products. And the use of AI in autonomous driving –which is increasingly being researched in Israel, as evident in Intel’s multibillion-dollar purchase of Mobileye – will further disrupt the truck-driving and taxi industry.

While such technology may displace and replace jobs en masse, forcing policymakers to grapple with automation and unemployment, it also holds the potential to increase productivity and efficiency.

“We think that this kind of disruption, on the other side, will create new jobs, new business models, and that there are ways to harvest the upside of this disruption, which is why we formed Cognitiv ventures,” Reichental said.

Aside from Reichental – who’s “not your typical venture capital” as he was former president and CEO of 3-D printer company 3-D Systems – other partners managing the AI fund include Eduardo Shoval and Yori Nelken. The trio has longed worked in the Israeli start-up scene as entrepreneurs.

OurCrowd announced the launch of the AI-related fund, named Cognitiv, on Thursday. It will launch with initial investments in an online venture fund, EquityX, an Israel-based firm granting genetic tests, KolGene, and an IoT kitchenware company, FreshKeep.

Cognitiv is the twelfth fund on the OurCrowd platform and it will grant investors access to around 20 mostly Israeli firms.

When asked why OurCrowd continues to focus on Israeli firms, Reichental didn’t beat around the bush.

“The fact that outside of Silicon Valley, Israel represents the highest density of innovative and successful early-stage start-ups. And it’s magic of start-up nation in an area that we understand fairly well, which is cognitive AI, and try to find the company that could be tomorrow’s category-maker,” he said, akin to the next Waze or industry-leader.

The AI fund is part of OurCrowd First, which for the past two years has been Israel’s most active seed fund, according to IVC Research. OurCrowd is also Israel’s most active crowdfunding platform, and it has been compared to Angel’s List in terms of allowing

Founded in 2013, OurCrowd is led by Jon Medved and it has raised over $500m. from more than 20,000 accredited investors from 112 countries. The platform has invested in 130 portfolio companies and funds.

The fund allows accredited investors to join OurCrowd with a minimum of $50,000, a much smaller amount than becoming a partner at traditional funds.