Seven months after its strategic acquisition of Israel-based analytics company, India’s leading e-commerce giant, Flipkart is now aiming to strengthen its foothold in the country and absorb the best of its technological finesse.
According to a report by a national daily, Flipkart now wants to expand its base in Israel and is reportedly placing off-shore management in the country and aims to set up an R&D centre with special a focus on cloud and cybersecurity. In coming years, the company also plans to acquire more local startups from the country, the report said.
“While the size of the team itself is small, Israel is a market Flipkart wants to actively pursue AI, computer vision and security tech,” a person familiar with the development was quoted.
Flipkart in September 2018, acquired Israel-based analytics company Upstream Commerce, which builds cloud-based, automated competitive pricing and product analysis solutions. With its acquisition, Flipkart aims to bring advanced, data science-based intelligent solutions to India to help local sellers boost sales and serve its customers better.
Israel As a Strategic Hub
Israel is known for its technological capabilities and over the last couple of years, it has transformed itself into a hotbed for innovation. Due to its thriving innovative research community and development in the field of technology, it has become one of the most important startup ecosystems in the world.
According to 2018 Global Startup Ecosystem Report, which analysed the startup ecosystems across the world, Tel Aviv emerged has the top best city for startups to grow and thrive. As per the study, the city has the highest startup per capita and investment of GDP in research and development (R&D).
In 2018, Isreali tech startups raised more than $5billion in venture capital funding and the country has witnessed major acquisitions from the international tech giants like Google, Apple and Facebook.
“The startup scene was very good even back then. But the ecosystem has matured a lot over the past decade, with experienced angel investors, higher aspirations, and an ecosystem that embraces change,” says Uri Levine, Co-Founder of Waze, a traffic and navigation app that was acquired by Google in 2013 for a whopping $1.3bn
Israel’s booming AI startups
Amidst the development in the overall startup ecosystem, AI startups have garnered considerable impetus, with the country estimated to be one among the top AI superpower in the world in coming years.
Towards the end of 2018, an estimated 1150 startups AI startups were believed to be operational in the country, catering to various segments in the country. As per a local daily, AI startups accounted for 17% of the total number of 6,673 active Israeli tech companies.
Unlike in the past, where the Indian government has been rather hush-hush about its deal with the Israeli government, under the present NDA government, what we have seen is an open embracing of the two countries with both the parties inking several deals with India hoping to get the best from the mighty Israeli technological capabilities.
Considering the vast pool of local talent and considerable government backing, more tech companies are likely to enter the local market in the coming years and Flipkart's move also comes in the backdrop of this recent India- Israel friendship.
Its acquisition of Upstream Commerce comes at a time when the AI and analytics market in the country is estimated to take upward mobility. With Israel’s startup ecosystem brimming with opportunity, Flipkart’s move is a clear move keeping in mind the larger goal of global expansion.
“With the Upstream acquisition, we will now have tech and talent presence across Asia, the US and Israel, some of the key global hubs for innovation. The team at Upstream Commerce is highly talented and as we welcome them to Flipkart we are also looking forward to making Israel one of our excellence centres to do cutting edge data science work,” Kalyan Krishnamurthy, CEO, Flipkart said, right after the acquisition of the company.
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Akshaya Asokan works as a Technology Journalist at Analytics India Magazine. She has previously worked with IDG Media and The New Indian Express. When not writing, she can be seen either reading or staring at a flower.