IDT Corp. is Incubating Tech Startups in Newark
[This week, we are rerunning some of our popular stories from 2017]
Almost everyone who arrives in Newark via Interstate 280 can spot the IDT building at 520 Broad St. from the elevated road. It’s the building with a big bold IDT logo on top.
When most folks think of IDT, they remember its days as one of the first VoIP companies. In the early 2000s, it owned a successful company called Net2Phone that specialized in international discount telecommunications. IDT sold that company for over $1 billion.
IDT has always been involved in a diverse array of industries. Founded by Howard Jonas, current chairman of the board, the company has been “very successful in a number of different industries,” Jacob Jonas, director of IDT Ventures, said. “We think of new and interesting ideas, and we are not afraid to go out and pursue them. We try to capitalize on current trends.”
The corporation used to own IDT Entertainment, now known as Starz Media, which did everything from animation for The Simpsons to producing a movie called Everyone’s Hero. IDT also invested in IDW Entertainment, which is now a publicly traded company doing business as IDW Media Holdings.
“When we first bought it, they were a small company focused on publishing comic books and graphic novels. Now they are the fourth largest comic book publisher by dollar share and have an entertainment division which has already produced two shows: Wynonna Earp (Syfy) and Dirk Gently’s Holistic Detective Agency (BBC America).”
IDT also started Genie Energy, a green and solar retail energy company that also has gas and oil exploration activities around the world. “We have an exclusive license to drill for oil in Israel,” Jonas said. Genie Energy has been spun off as its own publicly traded entity.
Back in telecom, IDT owns and distributes the Boss Revolution brand of phone cards that are sold in bodegas in cities across the country. The Boss Revolution brand offers a suite of communications and payment services which allow people to stay in touch and share resources around the world.
Boss Revolution has been so successful that it is fueling the company’s current investment in high upside technology services, like the company’s point of sales division, National Retail Solutions, and PicuP, a free business phone service that answers, routes and manages inbound calls. IDT also recently announced its acquisition of LiveNinja, a business communications tech startup located in Miami.
In 2015, IDT developed two initiatives, both run by Jacob Jonas who had been working in advertising until he joined the company. The first initiative was to start an internship program for software engineers.
“Being a veteran of various internship programs at large companies I had an idea of what it would take to deliver a comprehensive internship program,” Jonas said. That initiative began in December 2015 with a one month winter internship program for eight technology interns.
“This past summer the program expanded and we ran a three month internship for 12 software engineers and data analysts hired from Rutgers, Columbia, NYU and General Assembly,” Jonas said.
The other initiative was to start an incubator called IDT Ventures.
“We have the special sauce that it takes to get companies in diverse industries to innovate and rapidly gain traction. We have a lot of expertise in telecom, messaging, POS, VoIP and payments technologies, so we can provide a value-add with our mentors and advisors,” he said.
In addition, IDT recently renovated its office to have the look and feel of a Silicon Valley technology firm. “There is an open floor plan, glass windows in all the conference rooms, vibrant red, green and yellow colors everywhere, a fully equipped gym, arcade games, and bean bag chairs,” he said.
IDT Ventures began advertising in the beginning of 2016 and “from then on, we’ve had a steady flow of applications,” he said. The application process can be found on the IDT Ventures website.
Applications are evaluated by Jonas and a panel of executives from IDT Corp. The panel evaluates if the company is a fit for the incubator program by assessing whether it has synergies with IDT’s core businesses, the experience of the founders, the company’s current level of traction, and the potential for the company to innovate and disrupt an industry.
“If it is a fit we’ll bring them in for a pitch. We have pitch days once every two weeks on a Wednesday after work,” Jonas said. “The same folks who evaluated the application, plus the CEO of IDT, Shmuel Jonas, attend the pitch event. After that we put our heads together to see if a team checks all of our boxes.”
Jonas emphasized that the company is looking for hard working and visionary teams that have synergies with IDT’s core businesses.
“We want to mentor a small portfolio of companies that we offer strategic synergies to. We are active investors. If we invest in your company, and you are motivated for success, our advisors are going to support you with energy and passion.”
IDT Ventures is looking for what it calls a “stacked” team whose founders have been part of a founding team before and have the industry expertise necessary to capitalize on industry trends and innovate ahead of the curve. The incubator is looking for early-stage companies that are beyond the idea stage and have gained some type of measurable traction. Companies will be expected to spend time working out of IDT’s Newark headquarters so they can interact with company mentors.
Two teams have already joined IDT Ventures.
“Our first investment was a company called PeduL. PeduL has started a crowdfunding website for college scholarships. The idea is to empower students to take charge of their financial future by telling their stories on the website and raising money toward their college tuitions. While this company doesn’t have perfect synergies with IDT,” Jonas said, “it is something that IDT’s CEO, Shmuel Jonas, is passionate about.”
The second startup, Imali Mobile, is developing payments technology which has synergies with IDT’s Boss Revolution business.
IDT Corp. has dedicated an entire row of window facing desks to the teams in the incubator program. IDT Ventures plans a small incubator class of four teams, so as not to spread the mentors who work at the company too thin.
“We anticipate, over the next year, we will find those next two teams and fill out the incubator. We don’t have set schedule like typical accelerator programs so we are looking for potential companies to join our program year-round.”.”
Jonas noted that IDT Ventures is essentially functioning as an investment arm of IDT, so it will consider investments that are outside of the incubator construct if they make financial sense and are interesting to the company.
