AI-Powered Monitoring Startup Odysight.ai Targeting Nasdaq IPO This Year

The Israeli company’s intelligent monitoring systems utilize advanced computer vision and AI capabilities to provide continuous, real-time monitoring of critical, hard-to-access aircraft components.

The controlling owner of the startup Odysight.ai, Mori Arkin, intends to issue the startup on Nasdaq in the coming months, Calcalist has learned. Odysight.ai’s intelligent monitoring systems, which utilize advanced computer vision and AI capabilities, are positioned strategically within the aircraft. The system ensures continuous, real-time monitoring of critical, hard-to-access components, significantly boosting operational readiness and reducing the need for manual interventions.

Odysight is currently traded on the OTC (over the counter) market in New York at a value of approximately $31 million. According to Arkin, “liquidity on the OTC is very small, and those who want to purchase shares in the company find it difficult to do so. We hope to soon be accepted to Nasdaq, and after the IPO, the stock will break through.”

The move to Nasdaq will be made through capital raising that Arkin will lead via Arkin Holdings, but at this stage, the company is not disclosing its recruitment target.
Odysight’s central system is based on artificial intelligence (AI), and its optical sensors are installed in complex mechanical components in the aircraft, such as the rudders, engine casing, and wheels, and they operate autonomously. The information they provide in real time is analyzed using algorithms, which warn of anomalies that could cause life-threatening accidents.

Calcalist has learned that the Air Force recently began integrating the new system into the Apache attack helicopters, and it is also supposed to be installed in the Hermes 650 drone, which Elbit Systems presented for the first time about two weeks ago at an air show in Singapore. In addition, the developer of AI systems for Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) solutions will have its sensors installed in helicopters the IDF is receiving from the surplus of the U.S. Army, which will be delivered during the next year and will be upgraded by Elbit.

The event that accelerated the development of the Odysight system was the crash of an Apache helicopter in the summer of 2017 near the Ramon Air Force base in the Negev, in which the pilot Major David Zohar was killed. An Air Force inspection committee found that the crash was caused by a failure in the installation of the steering rod, a few months before the crash – a failure that caused the rod to wear until it was severed. The Air Force expressed doubt as to whether it was possible to identify the wear in the steering rod ahead of time, and the committee’s conclusions included the recommendation to monitor components that affect the safety of the helicopters, to which the technical teams’ access is limited.
Odysight operates from Omer in the Negev and is managed by Col. (ret.) Yehuda Ofer, formerly an Air Force pilot and IDF attaché in Italy, Greece, Serbia, and Croatia.

In 2018, Odysight, then under its former name ScoutCam, was split from the biomed company Medigus. In March 2023, it completed a private fundraising round from the existing shareholders in the amount of approximately $14 million, with the scope of its total fundraising amounting to approximately $44 million. The main investment in it, amounting to more than $20 million, was made by Arkin himself, who in the last year increased his holding in the company to 52%.

The tiny optical sensors, which Odysight uses to monitor components in aircraft, are a further development of miniature cameras developed for medical applications. Their diameter is 1.1 mm, and they include a self-illumination source and allow a view into the human body.

“I am mostly excited by the smells of pharmacies and hospitals and less by the smell of jet fuel,” said Arkin, whose majority of investments so far have focused on companies in the medical field. “Despite this, I chose to increase my stake in Odysight because I saw things in it that I had never seen before. Usually, you have to stomp your feet and knock on customers’ doors to get them to buy a new product, but in this case, the opposite happens.”

Arkin added that “in the case of the system we developed, we discovered a huge need in Israel and around the world. All doors are open to us, and the curiosity and interest shown by the customers in the solutions we offer in the field of aviation safety are so great that we realize we have found a required solution. The fact that the system is embedded in the Apache helicopters of the Israeli Air Force, in Elbit’s new aircraft and later also in other aircraft, shows the high potential of our system. I believe that the prestige of the Air Force, and the lessons learned that will still be learned in many armies in the world following the war in Gaza, will allow us to quickly penetrate the global market as well. In the field of monitoring airborne systems there are many customers, and we are making a significant leap forward.”

Beyond the military aviation market, where it is easier to implement systems like that of Odysight, the company also has its eyes on the civil aviation market. However, even though it is much larger, it requires complex and lengthy licensing and approval procedures from the international aviation authorities. “The applications of this system are endless,” said Arkin. “The same algorithm that is good for aviation is suitable for many other industries. As a company, we are trying to focus on the field of aircraft, but we are also looking at establishing a team that will focus on finding partnerships with huge technology companies so that it is possible.”