As reported in Israel21C: Israeli startups raised $910 million through acquisitions and funding rounds in a seven-day period in January 2015.
Acquisitions and funding rounds are de rigueur for the Israeli startup arena but even veterans and VC experts were astounded to see blue-and-white tech ring up over $900 million in a seven-day spread last week.
Amazon’s purchase of Annapurna Labs, the Yokneam-based semiconductor company, for $370 million was the largest of the deals. The acquisition marked Amazon’s first purchase in Israel.
HARMAN paid $200 million for mobile software management company, Red Bend Software.
Dropbox picked up CloudOn to a tune of $150 million.
Microsoft acquired equivio, text analysis software developer, for $50 million.
Alibaba also set the cash register ringing with its investment in Israeli company, Visualead. The giant Chinese online marketplace infused a reported $5 million into the Herzliya company that makes a visual QR Code generator.
Other big funding rounds included cloud-based testing company Ravello Systems raising $28 million; AppsFlyer app promotion campaign tracker raising $20 million; patient monitor startup EarlySense raising $20 million; Fintech startup BlueVine securing $18.5 million, and trend tracker TayKey raising $15 million.
Smaller funding rounds included recruitment advertising firm RealMatch shoring up $8 million and insert, mobile software platform, raising $5 million in seed money.
Amazon’s first Israeli purchase
“One of the ways for multinationals to expand their presence globally and specifically in the Israeli market is through acquisitions. We know that Amazon has been looking for a long time at the Israeli market. We think [their purchase] is the first of many. We’re glad to see Dropbox coming in. And we won’t be surprised if the others continue to come in and the ones already present in the market continue to invest,” Gil Canaani, an associate at Canaan Partners and Managing Director of the Young Venture Capitalists Forum, tells ISRAEL21c.
Canaani points to Microsoft’s two recent deals – its purchase of cyber security start-up Aorato in November and last week’s buyout of equivio – as further proof that the big companies see Israel as a prime spot for innovations.
Red Bend says it agreed to a buyout by the American audio and infotainment equipment company HARMAN to expand its market reach.
“By joining forces with HARMAN, we will accelerate our growth in expanding markets such as the connected car while also continuing to support billions of mobile devices. Beyond mobile, Red Bend and HARMAN will implement OTA software management to enhance infotainment and embedded system performance as well as other in-car ECU-based systems. These solutions will benefit the entire automotive ecosystem through cost savings, increased security and a seamless customer experience,” said Yoram Salinger, President and CEO of Red Bend.
Rise of Asian investments
Israeli high-tech and biotech startups saw a record year of acquisitions and initial public offerings in 2014 and at the end of last year, high-tech experts had already begun predicting that 2015 would be a big year for Israeli companies.
Speaking to ISRAEL21c, Jonathan Medved, CEO of OurCrowd equity crowdfunding, echoed the belief among many in the field that the rise of Asian investment would also “become a significant part of the business here.”
“There’s a mind shift among Israeli entrepreneurs that they’ve almost completely targeted North America and Europe until now,” says Canaani. “I think what we’ll see is a stronger trend of companies targeting other markets in Asia as well. A lot more relationships will be established in these markets.”
Like Samsung’s back-to-back investments. The Korean tech giant invested $10 million into EarlySense, and one week prior to that Samsung Ventures took part in the $12 million funding round for Rounds mobile app for group video chats, said to takeover WhatsApp.
And, of course, Alibaba’s first foray into Israeli tech came last week with its investment in Visualead – yet another nod to the country’s prolific startup tech scene.
“We have already seen O2O as a major area of growth in China. Working with Visualead, a dynamic startup and first-mover in this field is the next logical step as we seek to enhance customer engagement on mobile platforms. We believe that Visualead’s leading Visual QR Code technology will complement our mobile marketing initiatives and enhance our ability to take advantage of the booming O2O opportunities in China,” said Zhang Kuo, director of Alibaba Group’s Mashangtao technology service.
“We’ll continue to see more and more multi-nationals coming in, and more Asian activity in Israel. Israel makes a strategic location for R&D and innovations,” Canaani says.