Foreign investors demonstrate confidence in Israel (from a Startup Nation to an Exit Nation)

1. Moody’s investors service (Oct. 7, 2015): “Israel’s resilient growth model, effective governance and steadily improving debt metrics underpin its A1 government bond rating and stable outlook…. Israel’s economic growth has outpaced that of most advanced industrial economies over the past decade, supported by a competitive high-tech export sector, substantial spending on research and development and a well-educated labor force…. Israel is one of the few advanced countries that have a lower debt-to GDP ratio….” Bloomberg (Aug. 2): “Israel’s workforce participation rates have reached the targets set by the government for 2020…. In the age group 25-64, the labor force participation rate was 77.2% for the first half of 2015….“

2. The US content solution giant, Pro Quest, acquires Israel’s Ex Libris for $500mn (Globes, Oct. 8).

3. Facebook and France’s EutelSat Communications will launch the $200mn Israeli-made satellite, AMOS-6, built by Israel Aerospace Industries. It will expand Internet access everywhere, delivering Internet from space (Israel 21c, Oct. 8).

4. Israel – which has more startups per capita than any country, and more companies listed on NASDAQ than any country other than the USA and China – continues to benefit from a positive flow of foreign investments, while the emerging markets of China, India, Brazil and East Asia are burdened with a negative flow – liquidated investments exceeding new investments (Globes, Oct. 13).

5. IBM, EMC and Cisco Systems have teamed up with the cyber security division of Israel’s Rafael Advanced Defense Systems – the developer of the Iron Dome anti-missile system – to build a national computer emergency response team (Bloomberg, Aug. 2). Deutsche Telecom, General Electric Ventures, Portage Advisors and OurCrowd participated in the $7mn round of private placement by the Israeli cyber startup, Morfisc (Yediot Achronot, Oct. 7).

6. US’ Bruker Corporation acquired Israel’s Jordan Valley Semi-Conductors, Ltd. for $53mn (Globes, Oct. 7). The US’ Rogue Wave acquired Israel’s Zend for about $50mn (Globes, Oct. 8). US’ Prosper acquired the Israeli startup, BillGuard, for $40mn-$50mn (Globes, Sept. 30). US’ Gilbarco acquired Israel’s Odysii for $35mn (Globes, Oct. 14).

7. Israel’s pharmaceutical giant, TEVA, acquired Mexico’s Rimsa for $2.3bn (The Market, Oct. 2).

8. $85mn invested by Lockheed Martin, Japan’s telecommunications giant, SoftBank, Spark Capital and CRV in Israel’s Cybereason (Globes, Oct. 13). The US bio-med venture capital fund, Third Rock Ventures, invested $45mn in Israel’s Neon Therapeutic, joined by $5mn from Access Industries. Singtel Innov8 led a $20mn 2^nd round of private placement in the Israel startup, Teridion. Battery Ventures, Sequoia Capital and Mayfield Fund invested $16mn in the Israeli startup, BigPanda. The multinational pharmaceutical giant, Novartis International, invested $15mn in Israel’s Gamda stem cell company as a follow up to its $35mn investment in August, 2014 (Globes, Oct. 11). Boston Scientific extended a $15mn shares-convertible loan to Israel’s Mvalve (heart valves), obtaining an exclusive option to buy the company for $200mn. Orr Partners led an $8mn 2^nd round of private placement by the Israeli cyber startup, Dome9 (The Marker, Oct. 2).

9. From January 2015, Israeli companies were acquired for $3.8bn, mostly by substantial US companies, compared to $3.3bn acquisitions in 2014. During the last twelve years, the scope of acquisitions was $45bn. Israel, the Startup Nation, has evolved into the Exit Nation with an average of one exit (acquisition) per week (Globes, Oct. 15).

Straight from the Jerusalem Boardroom #248
https://bit.ly/3u29k9g

Foreign investment in Israel’s high-tech companies surged to new heights in the 1^st quarter of 2021 – $5.7bn in 172 deals – which is up 89% over the impressive 4^th quarter of 2020 and double the volume of the 1^st quarter of 2020.

2020 was the first year of surpassing $10bn in capital raised by the Israeli high-tech sector from investors in the US, Asia and Europe, who trust the maturity of Israel’s brain power. Investments in Israeli companies more than tripled in six years, reflecting the effective response by Israeli startups to the technological, medical, pharmaceutical, educational, social and digital challenges posed by Covid-19.

Israel’s economic performance in defiance of Covid-19 is presented by Dr. Adam Reuter, the Chairman and Founder of “Financial Immunities,” Israel’s largest financial-risk management firm, and the co-author of Israel – Island of Success:

Israel has led the globe in the rapid administration of Covid-19 vaccinations due to effective negotiations with Pfizer and an efficient, country-wide medical infrastructure.
Israel is the second lowest among OECD countries in the number of Covid-19 deaths per number of Covid-19 cases: 0.7% compared to the 2.3% OECD average. Israel features a young population (median age of 30 compared to the OECD’s 42) and an effective country-wide medical infrastructure, including top level HMOs and hospitals.
Israel is ranked 12^th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
The International Monetary Fund’s 2025 GDP growth forecast for OECD countries: Israel – 4%, OECD average – 2.2%, US – 1.8%, Australia – 2.5%, Ireland – 2.6%, France and Canada – 1.7%, the UK – 1.6%, Germany – 1.2%, etc.
Israel’s 2020 GDP was reduced by 2.5%, compared to the OECD average reduction of 4.1%, South Korea – 1%, Norway – 0.8%, Australia – 2.6%, US – 3.5%, Japan – 4.8%, Germany – 5%, France – 8%, the UK – 10% reduction, etc. GDP growth was recorded in New Zealand – 2.4% and Ireland – 3.5%.
In 2020, Israel was ranked 20^th among the 37 members of the OECD in terms of GDP per capita, featuring $43,000 (GDP – $408bn), ahead of Japan, Italy and Spain, and very close behind the UK ($44,000) and France ($45,000).
Israel’s debt-to-GDP ratio increased from 60% in 2019 to 72% in 2020, compared to the OECD’s average increase from 66% to 82%. The 2020’s debt-to-GDP ratio was 266% in Japan, Italy – 161%, the US – 131%, Germany – 73%, etc.
Israel’s foreign exchange reserves-to-GDP ratio of 41% (3^rd among the OECD countries) attests to its financial stability, and Israel’s capability to raise foreign credit promptly in a cost-effective manner. Israel’s foreign exchange reserves in March 2021 – $186bn.
During the past decade, Standard and Poor (S&P) accorded Israel a positive credit rating trend, unlike the negative trend for the G-7 countries. In 2020, notwithstanding Covid-19, Israel’s credit rating (S&P) remained at AA.
Some 380 global high-tech giants operate in Israel, including Microsoft, Amazon, IBM, Intel, Cisco, Apple, Verizon, Applied Materials, Dell, HP, Kodak, Oracle, Philips, SAP, Medtronics, GM, eBay, GE, etc. Israel leads the world in the ratio of research and development investment to GDP: 4.9%. 85% of this investment comes from the business sector.

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