A new joint venture between an international consultancy firm COBA Technology and Dublin-based business strategy consultants, Prospectus, is seeking to facilitate speedy international expansion programmes for Irish technology companies.
The move comes as the rapid expansion of the global technology industry has raised the competitive stakes among rivals.
COBA Technology helps technology firms to exploit new markets speedily by devising a low-risk action programme maximising on the commercial potential of a company's intellectual property. This is achieved through the establishment of worldwide licensing agreements and international joint ventures.
The company was founded in 1996 by Amit Ben-Haim, an Israeli entrepreneur with a background as a lawyer, who rose with the technology tidal wave in Israel in the early 1990s. Mr Ben-Haim wet his feet in the technology industry when he and his brother developed a cardiovascular medical device which they later sold on to a multinational pharmaceutical and medical company for a "substantial" sum.
He believes first-hand experience, and an understanding of the obstacles facing young companies are the most important attributes he brings to COBA as its managing director. "The current structure in Ireland is very similar to what happened in Israel. I have a real feeling of `been there, done that'. What we learned from that experience was that a company's intellectual property forms the basis of a company's strength."
COBA Technology became an offshoot of the COBA/Renaissance Group a Nasdaq-quoted company with a turnover in excess of $400 million (£283 million) when the group decided to form an arm specialising in "smart" companies that base their value in unique intellectual innovations.
COBA/Renaissance originally focused on transferring manufacturing functions to countries which could be penetrated through licensing arrangements. Renaissance is a consultancy with expertise in the telecommunications, financial and utility sectors, providing opportunities for strategic global introductions.
Mr Ben-Haim says the greatest lesson learned from the Israeli experience is to widen the distribution of a product once it has been developed in the fastest possible time and with minimum risk. But the reality is not often so simple. "Companies today find it hard enough to survive in their own markets without having to understand export laws in other countries. We take that burden off them."
COBA Technology views a company's portfolio of intellectual property rights as a profit centre to be exploited through global licensing, joint ventures, acquisitions and mergers. It does not involve itself in establishing manufacturing bases for these companies in other countries, even though the licensees or partners may choose to do so. COBA Technology is concerned primarily with speed to market.
"The window of opportunity in every market is narrower than ever before because of the transparency of information disseminated via the Internet, exhibitions, telephony and conferences. It falls into the competition's hands very quickly making the cost of development time for other markets critical. It makes more sense to find someone in another market who already has an established name and distribution channel."
Sometimes it is all down to timing. Many companies COBA approaches in foreign markets are looking for a lifeline to replace their existing offering as it is about to be rendered defunct by newer technologies.
Though COBA Technology has a presence in the US, Israel and Europe, and offices and affiliates in more than 20 countries, it is only ever working with 10 or 15 companies at any given time. Mr Ben-Haim says this is because it is only interested in offering a complete end-to-end service to the client.
Once it takes on a client, COBA will audit its intellectual property and conduct due diligence on its perceived strategy. Often Mr BenHaim says this has to be realigned for the target market. Then COBA will establish whether the client can be protected in these markets, or if the product might have to be modified. It will then draw up shortlists and arrange interviews with potential partners.
Where a licensing agreement can be arranged with someone in the target market, the licensor will receive an advance payment in recognition of the savings the licensee has made on research and development in bringing the product to market. Generally a 10- to 15-year licensing agreement will be drawn up which will include royalty payments based on an agreed percentage which will be paid to the licensor in accordance with net sales on a quarterly basis.
Alternatively, if the manufacturing capabilities are not available in the target market, COBA will look at establishing a joint venture or merger for distributing or finishing the product.
COBA charges its clients on a fixed cost per month basis for the first six months to a year. If the expansion is successful COBA takes a percentage of the royalties, or opts for stock options which it will cash in at the flotation stage the preferred end goal for COBA.
The new venture with Prospectus was initiated as a means of entering the Irish market, and because the Irish operation has the local knowledge to conduct introductions to start-up companies here. Already one or two project opportunities have been presented, which Mr Ben-Haim says vindicates the decision not to enter the market alone. "I believe the biotechnology industry is just bubbling up in Ireland and I'm very excited about meeting up with the people involved. We have definitely come across several companies already with very promising products."
