Israel-US fund, pivotal to launching local hi-tech, celebrates 40 years

Lying at the heart of Israel’s economic and trade relationship with the United States is the Binational Industrial Research and Development (BIRD) program.

When Israel was beginning to build its fledgling hi-tech scene in the 1980s and 1990s, BIRD played a pivotal role in launching the civilian technology sector.

“The growth of BIRD has been a pillar of US-Israeli cooperation on non-defense research and development,” said Dr. Eitan Yudilevich, BIRD’s executive director, who spoke with The Jerusalem Post on occasion of its 40th anniversary.

Companies or research institutions can apply for BIRD funding only if an Israeli entity can find an American firm to apply jointly, offering an innovation that is of mutual interest to both countries.

A generation ago, “it was essential for companies who wanted to enter the US market to cooperate with US companies,” Yudilevich said. “And we were a boat for matchmaking and for funding.”

Venture capital funds didn’t start to work in a large-scale capacity locally until the beginning of the 1990s. Until then, it was much harder for Israeli start-ups to raise funding, so BIRD was much more critical to the ecosystem.

And now with venture funds, private equity, angel investors and multinational corporations pouring in money, BIRD has attained an auxiliary role, providing a stamp of approval for future investors.

The foundation also helps raise funds for start-ups which are past the initial seed fund-raising step, proceeding through the tricky intermediate stage. (Many companies selected by BIRD spend two-tothree years in an incubator, which takes equity from the fledgling company.)

“A company may have a product, they have demonstrated it in Israel,” said Yudilevich. They want to go to the US market, they cooperate with a large company. And here is the idea, to adapt the product to US regulations, to improve the performance and bring it to a more mature stage. That’s where BIRD comes in.”

The executive director touted BIRD’s success stories, mentioning how Israeli bio-tech firm Atox Bio worked with the University of Maryland. After having raised almost $60 million to date, the company is going on to phase III clinical trials involving patients with necrotizing soft tissue infections (flesh-eating bacteria). The firm may not have been able to be successful without its American partnership, Yudilevich added.

Now that Israel is much more advanced technologically and economically, the BIRD model has shifted to support Israeli-American cooperation.

Until recently, many American companies didn’t bother to go abroad to procure technology.

“Even 15 years ago, or 20 years ago, any company in the US would tell you: we’re happy with the US market,” Yudilevich said, adding that some US firms now come to the Jewish state because their Israeli peer is offering superior technology.

Founded in 1977, the foundation connects Israeli and US companies that seek to jointly develop commercial products, funding some 950 projects to date with cumulative sales of $8 billion. Around 20 projects get funds annually by BIRD, which is based in Tel Aviv and employs 11 people in the two countries.

Aside from BIRD, other jointly funded US-Israel institutions the Binational Agricultural Research and Development Foundation (BARD), and the Binational Science Foundation.

With a fourth fund, BIRD Energy, having been launched in 2017, BIRD seeks to expand to natural gas and homeland security verticals.

Selected companies commit to repaying the BIRD grant if the project leads to market success. In the event that project fails to bear fruit, no repayment is required. BIRD provides up to 50% of a project’s budget – from research-and-development to the initial sales campaign – and the foundation does not receive any equity or intellectual property rights.