AY Group builds an innovative Growth Platform
16 November, 2020
Aimed to drive IIoT and Medical Devices hardware companies. Yaniv Rod: "The companies will focus on their own core technologies, while we provide them with all the services and support they need to succeed"
Above: Yaniv Rod (left) and David Vactor. “We are keeping production in Israel”
When Arrow Electronics reported its Q3, 2020 results, the employees and managers of Shiratech and its parent company, AY Electronics Group, were amazed: In a presentation to investors and analysts, Shiratech emerged as one of Arrow’s future engines of growth. A huge company, with sales of $30 billion a year, pins its hopes on a manufacturer of Industry 4.0 solutions from Petah Tikva (near Tel aviv), whose product has just begun to enter the market.
Shiratech has developed and manufactures the iCOMOX platform to monitor the production floor. The platform includes five different sensors, and connects through a number of communication channels to organizational management software, with an algorithm for detecting faults and irregularities in the industrial production systems.
The platform is distributed worldwide through Arrow. Techtime has learned that the company is in advanced contacts with T-Mobile, that the products are being tested for monitoring the railway system in Germany, and that it is preparing to supply a cloud platform allowing the information to be received from the sensors and analyzed. Siemens has decided to adopt it in its MindSphere cloud.
Shiratech’s experience became a business model
Yaniv Rod, the president and co-owner of the AY Group, says that that the work with Shiratech is an expression of the group’s new vision: “For decades we were known in the industry as a distribution company, but this has not been the case for a long time. Today we are building a company that provides support to large technology companies and for growing start-ups. It gives them full backing in development and production, until success in the market.
“We invested in Shiratech and focused it on Industry 4.0. In the development stages, we provided Shiratech with engineering support. In the next stage, AY Group provided the necessary support to carry out the planning for manufacturing and the transition to production, and we provided them with all the needed production services.”
These are exactly the kind of services that the group has also provided to CardiacSense and Aura Air. CardiacSense has developed a watch-like accessory for early detection of cardiac arrest and stroke, and for measuring additional medical parameters. Four years ago AY made a significant investment in the company, and since then has been leading it from development to production.
CardiacSense and Aura Air enter the market
In 2020, CardiacSense signed distribution agreements to the tune of over $70 million. Founder and CEO Eldad Shemesh: “AY has invested in us and has also brought in other investors. They accompanied us from the beginning, including short-run production, developing assembly and testing arrays, and the production itself. Today, we are starting production of 15,000 units, and by the end of the year we will place another order for 50,000 units.”
Aura Air has developed a technology to detect and purify airborne contaminants, including Corona viruses. It has raised approximately $3 million from investors such as Merhavia and AY Electronics. Last month it signed a $30 million distribution agreement in Japan for a period of 3 years. Co-founder and CEO Aviad Schneiderman described the AY Group as an “ideal investor”. According to him, “They don’t hassle us, and don’t waste our time. When we said we needed assistance with production, they put their entire management at our disposal. They help us with procurement, storage, production planning, and cost reduction. Today they also manufacture for us in very large quantities.”
An incubator with a “Frontline Production Floor”
Following the initial success of the new model, AY Group redefined its core business: supporting and growing technology start-ups developing Medical Equipment and industrial IoT (IIoT). In recent months, it has built dedicated support units for its portfolio companies, which provide planning services, production, engineering support, and assistance in market penetration and financing. Soon, it plans to set up the Tomorrow Land Revolution incubator company, which will also recruit investors and make investments in the group’s portfolio companies.
It prepared a workspace for the companies, in its main building in Petah Tikva, where it has established an initial production infrastructure, given the nickname the “Frontline Production Floor”. In fact, it is a kind of Fab Lab that allows the portfolio companies to carry out immediate production of prototypes for testing and evaluation, make quick changes according to customer requirements, or immediately produce small quantities to send samples to potential customers.
The buildup includes HR activity: Shiratech CEO David Vactor came from Ceragon and Applied Materials. The new manager of operations and the projects division Raz Pinko, came from SolarEdge and Ceragon, and the new VP for development ,Guy Zohar, brought experience in managing large projects in Nokia, Avaya, and Kodak. The chief technologist is the physicist Dr. Boaz Almog.
Yaniv Rod: “We want to keep production in Israel, and give our companies peace of mind. They will focus on their own core technologies, while we will provide them with all the services and support they need. We have many years of experience in procurement, engineering, relationships with suppliers and distributors, and access to production lines. All of these will be available to our companies to ensure that their success.”