Israeli hightech attracts more overseas investors

Straight from the Jerusalem Boardroom #222, September 08, 2017

The entire series of the Jerusalem Boardroom: http://bit.ly/2st1Nn3 

1. During 2016, overseas investment in Israel totaled $12.6BN - a 7% increase over 2015, while overseas investment in the world declined by 2%.  320 overseas multinationals operate in Israel, spending 50% of their research & development budget in Israel, employing 50,000 people. 200 multinationals perform both production and R & D operations in Israel. During the last decade, there has been an annual increase of 30 multinationals entering Israel, compared to a 10-company-increase a decade ago (Globes, September 7, 2017).

2. Japan’s Mitsubishi Tanabe Pharma (MTPC) acquired Israel’s NeuroDerm, which developed drug treatments for Parkinson’s disease, for $1.1BN in cash – the largest ever buyout of an Israeli pharmaceutical company. According to the Economist Intelligence Unit (August 2, 2017), “the flow of deals [in Israel’s hightech sector] seems to be increasing steadily.  On July 25, 2017, five separate acquisitions totaling $135MN were announced, and capital raising by Israeli companies totaled $1.26BN in the 2nd quarter of 2017, compared to $1.8BN in the peak, 4th quarter of 2016.  The Mitsubishi purchase reflects the growing involvement of Japanese multinationals in Israel, especially in technology companies.

3. The petrochemical giant, MexiChem, acquired 80% of Israel’s smart irrigation, Netafim, for $1.5BN.  Netafim employs 4,500 persons in 110 countries (1,000 in Israel), owns 17 production plants and 29 subsidiaries (Globes, August 8, 2017).

4. Germany’s Mercedes-Benz Vans invested $50MN in the NYC-headquartered VIA, which was established by two veterans of Israel’s Air Force. VIA developed a scalable, on-demand shared-ride solution for public transportation in major urban areas (Globes, September 5, 2017). Israel has attracted major investors in the areas of autonomous cars, as documented by
BMW’s January 2015 investment in Israel’s Moovit, which has developed live public transportation service information; the January 2016 Stamford, CT-based Harman International Industries acquisition of Israel’s automotive cyber security TowerSec (Globes, Jan. 6, 2016); the May 2016 Volkswagen’s $300MN investment in Israel’s ride-sharing application, Gett Taxi (Globes, May 26, 2016); the August 2016 Ford’s acquisition of Israel’s self-driving machine learning and computer-vision, SAIPS; the September 2016 Volkswagen’s joint venture with Israel’s automotive cyber security CyMotive Technologies; the March 2017 Intel’s $15.3BN acquisition of Israel’s autonomous car technologies, MobilEye; the June 2017 investment of Japan’s Toyota Motor Corp. and Sumitomo Mitsui Banking Corp. (via Mirai Creation Investment Fund) in Israel’s communication chipsets, AutoTalks (Globes, June 26, 2017); and the August 2017 Delphi Automotive investment in Israel’s developer of advanced laser-based sensors for autonomous cars, Innoviz Technologies. Skoda Auto, a subsidiary of Volkswagen, is establishing an Israeli office in collaboration with Israel’s Champion Motors, aimed at identifying autonomous car technologies (Globes, August 25). Maniv Mobility raised $40MN, dedicated to early-stage investments in Israeli and US mobility technologies (Globes, July 27).  Insight Venture Partners, the NYC-based investor in innovative technologies, led a $75MN round in Israel’s digital adoption platform, WalkMe, which is used by over 25% of the Fortune 500 companies (Globes, July 27).

5.  Aristocrat Leisure Ltd., Australia’s gaming solution giant, acquired Israel’s gaming solution, Plarium, for $500MN (Globes, August 11).    

6. More acquisitions: the Santa Monica-based Vista Investment Group acquired Israel’s digital experience solutions, Applause, for $115MN (Globes, August 25). NYC-based SK Capital acquired Israel’s pharmaceutical, ChemAgis, a division of Perrigo, for $110MN (Globes, August 11). The Mayfield, OH-based Ferro acquired Israel’s digital printing on glass, Dip-Tech, for $80MN (Globes, August, 3). Three of the original owners of Israel’s mobile ad-tech Taptica sold their shares on the British AIM stock exchangefor $51MN (Globes, July 27). Boston-based LogMeIn acquired Israel’s Chatbot and Al startup Nanorep for $45MN (Globes, August 3).

7.  Merck, the German pharma giant, is establishing a 20MN Euro hothouse for Israeli startups.  The hothouse is located on the grounds of Merck’s research & development center in Yavneh, Israel, which employs 300 people (Globes, 24).

8.
Israeli export of goods and services grew by 6% during the first half of 2017 – higher than the first half of 2016 - totaling $50BN (Globes, August 31).