Apple acquired Israel's gesture recognition company, PrimeSense, for $350MN (Globes Business Daily, November 24, 2013). According to Matthew Panzarino on TechCrunch.com, “when Apple purchases companies it often has both short and long-term goals in mind for their technology.” He adds that his sources tell him that, “Apple was likely interested in a new mobile chipset PrimeSense was developing that would eventually be suited for devices like iPhones and iPads. These chips and accompanying sensor and software tech could be used for a variety of purposes like identity recognition and indoor space mapping.”
TechCrunch reports that the Israeli start-up PrimeSense began as a company that made 3D sensing software and camera systems. After licensing its system to manufacturers, they also became a silicon company. “That’s an insane market to just waltz into, and it takes real conviction that you’ve got something special to do that. Silicon is expensive, difficult to manufacture and relies on a limited number of foundries to produce,” wrote Panzarino. As a result of Prime Sense’s brimming confidence, they were offered a big partnership deal with Microsoft. That kept Prime Sense busy with supplying sensors to other companies such as Matterport, Qualcomm’s Vuforia gaming platform and 3D scanner Occipital
Mexican billionaire, Carlos Slim: "The Slim Group will take part in additional investments in Israel. We like to have our finger on the pulse of new technologies, and Israel is a world leader in this field. We are interested in Israeli technology developments." Earlier this month, Slim's América Móvil SAB de CV participated in a $60MN round of private placement by Israel's Mobli, which developed a mobile social network photo and video-sharing platform (Globes, Nov. 28).
Mobli, which launched in 2011, is a multi-platform photo and video sharing community focusing on connecting people around common interests by allowing users to follow people, hashtags and even locations straight to their feed, according to the Jewish Business News web site. Movil will offer Mobli’s services to its mobile users as part of a business collaboration.
Mobli will use the proceeds to launch and expand its visual search engine enabling its users to see the world through other people’s eyes, and to scroll back in time through previous images, reports Jewish Business News.
“The mobile access is significantly enriching our daily lives and is opening the door to completely new experiences for users around the world. Mobli has developed a remarkable technology and this strategic alliance will allow América Móvil to bring value added experiences for its users throughout the Americas,” said Carlos Slim. “The Mobli team has shown extraordinary skills in creating a powerful and innovative product for its users.”
“This is an incredibly important milestone for Mobli – for our users, for our investors, and for our team. This represents a remarkable opportunity for Mobli and a greater responsibility to continue improving and building powerful technology,” said Mobli CEO and founder Moshe Hogeg. “Our new strategic partnership with América Móvil will allow us to reach a massive community of millions of users in Latin America.”
CNN, November 22, 2013: "Technology companies are on a shopping spree in Israel, spending billions on ever larger deals and fueling the country's startup success story. Greater Tel Aviv is a home to a vibrant tech start-up scene, second only to Silicon Valley. Microsoft, Google and Cisco have large R&D offices in the area. Google, Apple, Intel, IBM and Cisco have been involved in a spate of high-profile acquisitions over the past two years, scouring the country for the next big thing…. Since 1998, Cisco has made 11 acquisitions and invested in 22 start-ups in Israel….
Dealogic data shows a big increase in activity in the sector, with nearly $4 billion in acquisitions of registered Israeli tech firms since 2012. But given this figure only includes deals where a valuation is made public -- and most deals are kept private -- the overall tally is likely to be much higher. Zack Weisfeld, an executive at Microsoft in Israel, estimates that about $13 billion in Israeli tech acquisitions have been completed since the start of 2012….
Last month, Facebook bought the Israeli start-up, Onavo, for $200MN. In June, Google acquired the popular social mapping firm, Waze, for $1BN. Two months later IBM acquired Trusteer, a fraud prevention company, for $1BN. Apple bought PrimeSense, known for its 3D sensors, for $345MN…. In Israel, most people are required to join the military after high school, gaining early exposure to advanced technology, and sometimes developing high-tech communication and defense systems…. The Israeli government offers grants, loans and tax breaks to encourage new tech firms and research and development…. The uncertain environment in the Middle East has played a role in developing a culture of adaptability and risk-taking.”
According to a Reuters report, Facebook bought Onavo, which is an Israeli mobile app-maker, in order to utilize its data-saving capabilities for a project aimed at making the Internet available to billions of people round the world who are not online.
Onavo's mobile app helps people cut mobile phone costs through more efficient use of data and claims to get up to five times more out of a data plan. Onavo's data-saving feature is likely to help Facebook in its plans to provide internet access to underserved communities by working out ways to reduce the amount of data downloads required to run mobile internet applications.
"We expect Onavo's data compression technology to play a central role in our mission to connect more people to the internet, and their analytic tools will help us provide better, more efficient mobile products," a Facebook spokeswoman told Reuters.
The three-year-old Onavo, makes free apps for Apple Inc's iOS and Google Inc's Android platforms. Onavo has raised $13 million in venture capital, according to Calcalist. Its investors are Sequoia Capital, Magma Venture Partners, Horizons Ventures and Motorola Mobility Ventures.
Ha’Aretz has reported that Onavo will keep its Israeli offices, making this the first time Facebook will run a research and development center in Israel.
Another Israeli start-up company called Waze, had caught the interest of both Facebook and Apple before it was purchased by Google. Its mobile app solicits input from almost 50 million users to improve directions and display traffic and road-hazard details and would also provide social features for Google’s navigation tool.
“Waze, a crowd-sourced navigation app, should help improve Google’s own mapping technology and offerings, adding a unique social layer that is complimentary to the platform and further differentiate Google from the competition,” Naved Khan, an analyst at Cantor Fitzgerald & Co., wrote in a research report.
Globes and Reuters both reported that in August of 2013, IBM, the world’s biggest technology services company, paid $1B for the Israeli company called Trusteer, that helps businesses fight computer viruses and fraud. .
Trusteer has for several years been recognized as a leading company in the web fraud prevention market. After, earlier this year, RSA, the security division of EMC, bought rival Silver Tail, which is considered the company closest to Trusteer in technological capability, it was clear that the giant computing companies, which have almost no presence in this area, and the big money, would pay attention to Trusteer.
“Beyond the aspect of the returns to the shareholders, we saw a very special opportunity here,” Trusteer CEO Mickey Boodaei explained. “IBM sought to set up a research laboratory in security, identified the potential of Israel, and wants to have a large presence here for building a platform for information security products as part of a new security division formed in 2012. We were very attracted to the opportunity of them establishing this capability in Israel and not somewhere else. We started to talk to them about it, to understand what they want to do, and we found a synergy between what we do and IBM’s path, and it seemed right. As far as the shareholders are concerned, the driver was to set up in Israel IBM’s biggest security lab, to develop it further, to leave a legacy behind us,” he added.
This is IBM’s thirteenth acquisition in Israel in fifteen years, and the company employs some 2,200 people locally, half of them in R&D. Trusteer’s activity will add to IBM’s existing security research operation here.
Trusteer is being acquired for its capability in responding to security needs of financial services users, but, from a technological point of view, both companies are aiming much higher. For some time, anti-virus programs have not provided the solution required for true end-user protection. The inadequacy of veteran security technologies in the face of today’s challenges, that include sophisticated attacks undetectable until they happen, makes a different approach imperative.
India Economic Times (Nov 8, 2013): "The presence of thousands of startups, and more engineers per capita than anywhere else in the world, makes Israel a natural hub for innovation…. Best known for defense and military-inspired technologies, entrepreneurs across the nation are now focused on building the next generation of healthcare applications…. Using artificial intelligence and digital technology, they are creating applications for diagnostics, tools for the visually, physically and mentally challenged as well as products that can improve agricultural output…. They have created a device that can be clipped onto spectacles, making it possible for a blind person to read, find an item, catch a bus or cross the road.
Israel's R&D expenditure account for approximately 5% of the country's $260BN GDP, higher than any western country. This excludes defense R&D.
There are also around 300 multinational companies in the country which are a big part of the ecosystem. Many of them, including Apple, Google, Intel, Microsoft, General Motors, and GE have set up research and development facilities in Israel to use the local talent and come up with breakthroughs.
Per capita, Israel has attracted over twice as much venture capital investment as the US and 30 times more than the entire European Union. In 2012, merger & acquisition (M & A) deals involving Israeli and Israel-related companies were valued at $9.74 billion, an 88% increase from $5.2 billion in 2011, according to Israel's IVC Research Center database. Israel has 135 engineers, scientists and PhDs per 10,000 people in the work force, the highest in the world.
The OECD: Israel is among the world's strongest economies, overcoming financial turbulence. Israel's economic growth is projected at 3.7% and 3.4% for 2013 and 2014 respectively (including 1% related to natural gas) and 4.5% for 2015. The budget deficit is expected to decline to 3% in 2014 and 2.5% in 2015 (The Marker, November 19, 2013).
About the Author: The writer is a consultant on US-Israel relations as well as the Chairman of Special Projects at the Ariel Center for Policy Research. Formerly the Minister for Congressional Affairs to Israel's Embassy in Washington, DC, the writer also served as Consul General of Israel to the Southwestern US.