Innovation Destination Hartford, in collaboration with the International Business Council (IBC), is showcasing global initiatives throughout Connecticut.
Kobi Benita, CEO of Nervomatrix Ltd. worked with the IBC, the Connecticut Economic Resource Center, Inc. (CERC), and the Jewish Federation of Greater Hartford to establish a U.S. presence for the company in West Harford, CT.
INNOVATION DESTINATION HARTFORD: Give us a little background about Nervomatrix and your role with the company.
KOBI BENITA: Nervomatrix is an Israeli-based company. The research and development and manufacturing are still done in Israel. The company is manufacturing a medical device for treating back pain. We are now in the process of introducing a new model for neck pain. We hope to release that by early next year.
My main job is to bring our Soleve system here to the United States and establish the sales network of the company.
IDH: With regard to Soleve, how was the system created?
KB: The idea belongs by Dr. Miguel Gorenberg, an Israeli physician who works at one of the largest hospitals in Israel. He came with the idea of treating back pain with dense electrical stimulation—and that’s what the Soleve system does. It is design to help patients to overcome episodes of back pain and significantly reduce pain perception from a higher level to a lower level.
That’s how the whole idea started. Nervomatrix CEO Ori Kanner, who is an engineer by trade, and holds a Master degree in radiology physics, developed the system and set up the manufacturing and service platform, got the system registered in the United States with the Food and Drug Administration (FDA) and in Europe with the Conformité Européene (CE). We are also an ISO-certified company, which means we get audited once a year from a European body.
It took about three years for Ori and his team of engineers to develop the system and then it took two more years to obtain the regulations approvals. We’ve had regulations approval since 2011 and 2012.
Since then we’ve done a lot of things—mainly trying to raise money for executing our plans to launch the Soleve system in Europe and the United States. Now we’re taking proactive measures to sell the Soleve system, right here in the United States and develop a sales and marketing network.
IDH: Why was it important for the company to have a U.S. presence?
KB: We believe that the biggest potential for sales for Nervomatrix, is in the United States. Since we are now targeting more multi-disciplined chiropractors’ offices, we have researched and found that there is a larger concentration of chiropractors in the United States than any other part of the world. There are more than 75,000 chiropractors in the United States and more than 25,000 clinics are operated and owned by chiropractors, so it’s definitely much bigger than anywhere else—even Europe or Far East and Asia. So it’s the biggest potential we see for our system.
Once we made a decision that the company has to have direct operations in the United States, we knew it was crucial to have a local presence to manage the sales representatives and sales force. You cannot manage them from Israel or any other country, you have to be present. There are a lot of activities involved with sales and marketing.
We’re in the process of appointing reps in key territories throughout the country. We’ve already appointed 15 reps who represent about 30 states including California, Connecticut, Florida, New Jersey, New York, and many others.
IDH: Once the company decided it needed a U.S. presence, why did you choose Connecticut?
KB: Why Connecticut? We found out that Connecticut provides loans and grants to companies that are willing to open an office here in Connecticut. With combined funds from the Department of Economic and Community Development (DECD) and Connecticut Innovations, we have raised about $450,000, which allows us to finance at least the first year and a half of operations here in the United States, so we can start building some sales and generating revenue.
IDH: In terms of building the company, how many people are located in the Connecticut office?
KB: In Connecticut, so far it’s just me. I’m running this company on a very lean budget. But the grant and the loan we received were based on the promise that we will have six employees in total—including me—within a year and a half. If we reach our projected sales volume, having a service person, an office person, a marketing person and maybe another sales manager will be absolutely necessary. We hope we can reach that goal.
IDH: How did you choose your Connecticut location?
KB: Out of all the cities in Connecticut, we decided to have our office in Farmington because we wanted to be near the University of Connecticut Technology Incubation Program (TIP) facility, which will help us eventually do some collaborative work with UConn. That was important to us as well for research purposes.
IDH: Can you discuss the future plans for your involvement at the TIP?
KB: We have two offices there, one for me and one for the Soleve system. We use this as a demonstration facility for potential buyers and clients as well as for training purposes.
We had an important event on October 29 with all the reps. They traveled to Connecticut and participated in a two-day event that included training and lectures about the clinical and medical background and pricing strategies. A chiropractor who is a client of Nervomatrix spoke about Soleve system and the benefits it provides to his patients and then we did some hands on training. The Soleve system has software and hardware, so it’s very intuitive, but you have to go through some hands-on training before you can use it.
The official launch in the United States took place at the end of October. It was a long process. We started around third quarter of last year. It took us almost a year to complete it and make the move.
IDH: And when did the Israeli company start?
KB: Nervomatrix was established in 2007. It took the company several years to develop the product. The system weighs more than 300 lbs., so it’s a big system that is aimed for use in clinics and not at home. It’s not something you can move from one place to another very easily. It requires installation and training and certification.
IDH: You were saying it’s a good fit for chiropractic offices.
KB: It’s a good fit for any clinic or organization that are seeing patients with back pain. So it could be pain physicians, physical therapists, sports medicine, or chiropractic offices. The system could be used in the private market and in the public market. We’re aiming for the private and public market, hospitals and other government-owned agencies or state-owned hospitals.
IDH: Let’s talk about your involvement with the CERC.
KB: CERC is an independent nonprofit organization that works with the DECD. CERC was very involved with getting the company here to Connecticut.
IDH: How so?
KB: Jason Giulietti, Vice President of Business Recruitment at CERC, was very helpful with taking us through the process with the DECD, helping us get all the paperwork ready, and finding the right attorney to do the deal. And then later on, Jason helped us with actual advice as to where to live and where to find an office. He also helped us negotiate a deal with the UConn TIP. It was a very good experience.
I think that’s what separates other programs in other states from Connecticut. CERC is doing an excellent job. And Jason and I have developed a personal friendship, to the point where I can call and ask for a personal recommendation for an insurance agency or any other contractor help I need. It’s a great thing. His services are very personal and very effective.
IDH: What are the company’s goals for the next few years?
KB: The biggest goal at the moment is to start selling and installing the systems—as many as possible. We already have the manufacturing facility in Israel. The product is already developed. It has all of the right regulations. So all we need now is to actually sell the system and put it in clinics.
Once we do that and start getting a regular monthly sales volume, we will consider manufacturing here in the United States, maybe in 2018, if the volume justifies it.
As I mentioned, Soleve is a very big system. It weighs about 650 lbs. when it’s crated and shipping to the United States costs almost $2,000 per system, not to mention the costs involved with installation and training.
So if volume gets up to a point where it makes sense to do manufacturing in the United States, we’ll certainly consider that.
And once volume goes up, we have to establish a service department, a manufacturing department, and we have to do even more research and development. That’s where UConn can come in and help with data analysis, which we want to put into the software and some other things we’re thinking about, such as possibly developing other products for other areas, such as elbows, shoulders, and knees using the same technology with a miniature system. That’s the idea. These are the long-term goals for the United States.
On a personal level, this not a company that was relocated from Boston to Connecticut. This is a company that decided to put direct operations in Connecticut, which means that I had to move here with my family and that’s a big, big move. Not just for the company, but for us personally. To be successful, both have to work out.
We’re getting all the support we could ever ask or from the Jewish community—they are embracing us and helping us in any way possible. And I have to mention Jason Giulietti from CERC; Brad Mondschein from Pullman & Comley, LLC; and Laura Zimmerman, Vice President of Jewish Public Affairs for the Jewish Federation of Greater Hartford. It’s important to mention their names because they are doing so much to help us out on a personal level and on a business level as well, connecting us with potential collaborators and even customers. So that’s very important.
For other companies thinking about opening operations in the United States, it can turn be a good move for you as a company to consider Connecticut and not to somewhere else. I would definitely tell them to consider Connecticut.
To learn more about Nervomatrix Ltd, visit www.nervomatrix.com.