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Microsoft acquires its 8th Israeli company

1.  Astute US investors leverage current economic insecurity – exacerbated by catapulting oil price – and the resulting decline in global valuations, investing in Israeli companies. While the scope of overseas investment in Israel is gradually reduced, due to the slowdown in US and global economy, sophisticated investors sustain investments in Israel, but in lower valuations.

 

2.  Microsoft is acquiring its 8th Israeli company, Zoomix, for $30MN (The Marker, June 5, 2008).  Veriphone acquired its 2nd Israeli company, Gazit-Yesoomim, for $15MN.  Its 1st acquisition, Lipman, was made in 2006 for $800MN (Globes, July 3).

 

3.  Susquehanna International Group (SIG) invested $18MN in Israel’s Plimus, its 2nd Israeli investment, in addition to another 2008 investment in WisAir (Globes, July 9).  Ascent Venture Partners led a $12.5MN 2nd round of private placement by Israel’s ClickFox (Globes, June 11).  Draper-Fisher-Jurvetson (DFJ) led a $10MN 2nd round by Israel’s AniBoom (The Marker, June 29). DFJ, Trilogy Partners and AT&T invested $7MN in Israel’s Zon Networks’ 1st round of private placement (Globes, July 10). Intel Capital, Apax and Smac Partners invested $6MN in Israel’s Mobixell Networks 4th (Globes, July 9). John Miller, co-founder of AVE, and Toronto’s Lion Peak Capital invested $2.5MN in Israel’s StimuHeal (Globes, July 10). Europe’s Milk Capital invested $2.3MN in Israel’s mPortico’s 1st round (The Marker, June 25).   

 

4.  IBM is intensifying its R&D operation in Israel (Jerusalem, Haifa, Tel Aviv, Herzliya, Rehovot), which currently employs 750 persons. Three Israeli companies – FileX, XIV and Diligent – were acquired earlier in 2008.  Since 1998, IBM has also acquired Israel’s Ubique (1998), iPhrase (2005), Unicorn (2006) and WatchFire in 2007 (Globes, July 7). 

 

5.  Israel’s high-tech production grew 4% in 2007, compared with 2006 – an all time high $17BN.  High-tech’s employment account for 7% of Israel’s manpower, but high-tech exports ($15MN) accounted, in 2007, to 23% of Israel’s export (The Marker, June 8).   

 

6.  Israel at 60.  According to Bill Witherell, Cumberland’s Chief Global Economist (June 18, 2008), “during each of the past five years Israel’s economy advanced at a faster pace than the average of all developed economies… Israel has a world class central bank and has followed responsible budgetary policies, despite the heavy costs of its security requirements.  Another important plus has been the influx of immigrant engineers, technicians and scientists from the former Soviet Union… A year ago, the OECD, invited Israel to become a member of this grouping of advanced nations with a common commitment to market economies and democratic principles… Fueled by its exports of high-tech goods and services, Israel’s current account surplus is expected to be maintained in the range of 2.5%-3% of GDP.  Israel’s most important market is the US, accounting for 45% of its exports in 2006.”  Witherell refers to some weak aspects of Israel’s economy: traditional economy burdened by low productivity, education system requires major reforms, income inequality, full-dependence on imported oil and “its political system, based on pure proportional representation, leads to a large number of parties and ever-changing coalitions, which make long-term planning and coherent government policies difficult to achieve.”    

 

 

 




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https://bit.ly/3u29k9g

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

  1. 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.
  2. 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.
  3. Israel is ranked 12th from the bottom among the 37 OECD countries in the number of deaths per million inhabitants: 645 compared to 1,145 OECD average.
  4. 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.
  5. 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%.
  6. In 2020, Israel was ranked 20th 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).
  7. 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.
  8. Israel’s foreign exchange reserves-to-GDP ratio of 41% (3rd 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.
  9. 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.
  10. 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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