As every month, VC Cafe is re-posting the “Invest in Israel” Newsletter, published by the investment promotion center of Israel’s Ministry of Industry, Trade and Labor, which offers many helpful tools for prospecting investors. This month’s top headline is that Israeli exits in 2013 reached $4.9 billion, making it a record year for Israeli high-tech. Browse the headlines below for more news. For the Invest in Israel archive, click here.
MIT TECHNOLOGY REVIEW CITES ISRAEL AS LEADING TECH HUB
The July-August issue of MIT’s Technology Review noted Israel as one of 8 leading innovation clusters in the world. The others included Silicon Valley and Boston in the U.S., Skolkovo Innovation City (Russia), Bangalore (India), Beijing (China), Tech City (London), and Paris-Saclay (France). MIT publishes its review annually, based on input from a number of different sources, defining technology clusters as locations with dense webs of interconnected technology companies, customers, and suppliers. Israel, which ranked in the top five, was particularly noted for its entrepreneurial culture and liberal immigration laws.
IBM ACQUIRING ISRAELI STARTUP TRUSTEER FOR AN ESTIMATED $900M
IBM recently announced its acquisition of Israeli data-security software company, Trusteer. Following the acquisition, IBM plans to establish a lab in Israel where Trusteer employees will work alongside current IBM researchers and software developers on data security solutions for apps and mobile platforms, as well as on programs to tackle malware and computer-based financial fraud.
Prior to the acquisition — the company’s 13th in Israel — IBM’s Israel operations extended across 14 locations with close to 1,100 employees. Israel is also the seat of the company’s largest R&D center outside the United States.
“IBM identified the potential and the asset in Israel, and understood the advantages of a large body that would research and develop products here,” said Trusteer Founder & CEO, Mickey Boodaei. “The most innovative fields will be handled in Israel.”
VENTUREBURN MAGAZINE RANKS TEL AVIV AS TOP STARTUP ECOSYSTEM
VentureBurn, the online magazine dedicated to the global venture capital community recently published a list of the top 20 startup ecosystems worldwide. Israel placed # 2 just behind Silicon Valley and ahead of Los Angeles (#3), Seattle (#4), New York (#5), Boston (#6), Singapore (#17) and Bangalore (#19).
The research was conducted by Intuit and was based on parameters which included startup output, funding, performance, entrepreneurial mindset, trendsetting, support, talent and differentiation. The authors explained Tel Aviv’s high ranking, writing that “Given major acquisitions like the billion-dollar Waze, which sold recently to Google, clearly Israel’s second biggest city has got the gumption for start-ups.”
MIT RECOGNIZES ISRAELI “WEB PROPHET,” DR. KIRA RADINSKY
MIT’s annual list of top technology figures worldwide under the age of 35 included Israel’s Dr. Kira Radinsky, 27, who started studying at Israel’s Technion at the age of 15. The “35 under 35” list has been published by MIT Technology Review Magazine since 1999. It showcases prominent researchers and innovators expected to have an important impact on the future.
Radinsky, along with her partner Eric Horvitz, co-director at Microsoft Research in Redmond, Washington, developed digital prognostication software that searches digital databases on the web for patterns that can help predict future events, such as the outbreak of disease, or population behavior. At 27, Radinsky is one of the youngest people on the list. “My true passion,” she says, “is arming humanity with scientific capabilities to automatically anticipate, and ultimately affect, future outcomes based on lessons from the past.”
GERMANY’S BAYER PARTNERS WITH ISRAELI COMPUGEN ON CANCER THERAPY RESEARCH
German pharmaceuticals company, Bayer AG, and Israeli drug company, Compugen Ltd., recently announced plans to collaborate on cancer treatment research, an agreement that could be worth some $500 million for Compugen.
The agreement stipulates Bayer’s application of the Israeli technology in its development of antibody-based immunotherapies. Immunotherapy is a medical treatment designed to stimulate the body’s own immune cells to battle cancer. Bayer further acquired the right to develop and market treatments developed with Compugen technologies as well as to develop and market the product following the preclinical research program, which will be jointly administered by the two companies.
The successful collaboration was initiated by the Israeli economic mission to Berlin, under the auspices of the Israeli Ministry of Economy, which arranged two successive visits in Israel for Bayer executives in 2010 and 2012.
ISRAELI ECONOMIC MISSION IN NY CONNECTS TO DIGITAL INVESTMENT COLLABORATION PLATFORM
Israel’s regional trade office in New York recently announced that, following a successful pilot run, it will be connecting to GUST, a global management platform for the sourcing and management of early-stage investments. The platform is designed to facilitate collaboration between entrepreneurs and investors, supporting them through the entirety of the investment relationship process, from pitch to exit.
As a country with a thriving entrepreneurial ecosystem, Israel attracts a great deal of global investment attention, making the value of a collaborative platform for both global investors and Israeli start-up companies potentially very high. Providing the infrastructure for identifying the rich opportunities coming out of Israel, the platform will help introduce investors to the deal flow of Israeli companies seeking investments, simplifying the communication process and delivering value to investors and startups alike.
ISRAEL’S HI-TECH EXIT BOOM: $4.9 BILLION IN 2013
IVC Research Center recently published a report which highlights the sharp increase in high-sum exits for Israeli start-up companies as well as Israel’s growing prominence in the global technology industry.
Overall, hi-tech deals involving Israeli companies have totaled $4.9 billion so far this year, making 2013 a record year for Israeli hi-tech exits. In the first 8 months of 2013 alone, six different Israeli companies have been involved in large-scale mergers and acquisitions in sums greater than $400 million. Furthermore, the sum total of deals valued at higher than $100 million during that period is greater than the entirety of deals in 2012, the average deal in this category climbing 38% in value from $321 million in 2012 to $443 million in 2013.These figures point to the spiking interest in Israel on the part of multinational corporations, who are increasingly establishing major R&D centers in Israel. The hi-tech exit boom has further captured the attention of global investors, who take note of the exponential return on investment in many of the companies recently sold.
APPLE POISED TO EXPAND ISRAEL OPERATIONS
Apple is expanding its operations in Israel, renting an expansive office space in a new Herzliya project, according to a report in Haaretz. The new area provides sufficient office space for 600-1,200 employees and signals Apple’s intention to significantly expand its development team in Israel. The company’s Israel operations have grown dramatically since established in late 2011, and already include three development centers whose workforce is estimated to number some 400-600 employees.
“Apple apparently appreciates what’s being done in Israel,” Shlomo Gradman, chairman of Explace, the Israeli Semiconductor Club, said. “Even though Apple has been active in Israel for only a short time, the company has been impressed by the abilities here.”
STUDY SHOWS ISRAEL TO BE A MAJOR SOURCE OF INNOVATION FOR MNCs
A study released by the Samuel Neaman Institute for National Policy Research along with the National Council for Research and Development at the Israeli Ministry of Science and Technology suggests that local R&D centers established by multinational corporations in the country are a leading source of innovations produced in Israel. The results of the study indicate that more patents are produced by Israelis employed at some 200 R&D centers run by leading global technology firms than by inventors in any other category.
The number of new patents by foreign R&D centers in Israel has been steadily rising, with some 1,000 new patents registered in 2012, accounting for 27% of all patents registered by Israel’s business sector that year. The study underscores the centrality of development centers in fueling innovation in Israel, as well as the centrality of Israeli scientists and entrepreneurs in developing new technologies for the global market. In 2010, the country placed sixth among countries belonging to the Organization for Economic Cooperation and Development (OECD) in the number of patents applied for under the Patent Cooperation Treaty, with 19.9 applications for every 100,000 people.
I'm a former general partner at google ventures, head of Google for Entrepreneurs in Europe and founding head of Campus London, Google's first physical hub for startups.
I'm also the founder of Techbikers, a non-profit bringing together the startup ecosystem on cycling challenges in support of Room to Read. Since inception in 2012 we've built 11 schools and 50 libraries in the developing world.
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