- Venture capitalist-turned-lawmaker seeks food tech investment
- Nutrient-rich milk for rickets and sugarless ice cream anyone?
When you think of New Jersey treats, hoagies and salt water taffies come to mind. Erel Margalit wants to change that by bringing enriched seaweed and sugarless ice cream to the Garden State.
The Israeli venture capitalist-turned politician spent last week touring the U.S. East Coast seeking investors for his vision to turn Israel’s Upper Galilee into a destination for the emerging health-tech category known as medical food. And he’s settled on New Jersey as a sister venue for his hub.
On Friday, the 54-year-old tech mogul swung by Rutgers, the largest university in the state, to unveil a partnership between the local higher-education institution and Israel’s Tel-Hai College. The plan is to nurture start-ups in the fields of agriculture and food tech, and something known as medical food: more than a dietary supplement, not quite a drug.
In the process, he’s going after venture capitalists and companies like Campbell Soup Co. and Novartis AG to invest in the project.
Margalit, a lawmaker for Israel’s opposition Labor Party and founder of Jerusalem Venture Partners, is trying to parlay his venture capital background into tech-oriented economic policy.
The business-and-lifestyle center he started in Jerusalem and the cyber-security incubator in the desert city of Beersheba, are two examples of Margalit’s approach to erecting new business from scratch. He wants startups to spring out of agricultural innovation in the Upper Galilee by harnessing the health benefits from food products such as enriched seaweed, which is being studied to fight Alzheimer’s disease, and the anti-aging properties of pomegranate.
Margalit is creating programs like these because the framework for government support of tech initiatives needs to change, he said.
“Business needs to lead and government needs to support,” he said in a phone interview before the ceremony at Rutgers.
Medical foods are not pills: They are designed to provide the special nutrients patients need to manage or treat their disease. While the U.S. Food and Drug Administration mandates that medical food can only be obtained with a doctor’s prescription, at the end of the day it is actual food that is eaten normally or ingested through a feeding tube. Milk enriched with the precise amount of calcium for rickets patients is one example.
Israel, dubbed the ‘Start-Up Nation’ in a 2009 book, has suffered a few economic setbacks. Growth slackened to a near-standstill in the second quarter as sluggish global demand and a strong shekel weighed on exports, which account for one-third of the economy. The International Monetary Fund trimmed its forecast for 2015 growth to 2.5 percent from 3 percent.
On the plus side, legislation set to pass later this year or in early 2016 means companies in the Upper Galilee will be eligible for incentives that include matching government funds for private investment and subsidies for employee wages and research & development, Margalit said.