Overseas investments in Israel expanded

Straight from the Jerusalem Boardroom #237
Previous Boardrooms: http://theettingerreport.com/category/economy/

1. 368 multinational corporations (mostly from the USA) operate in Israel – mainly research & development centers – leveraging Israel’s brain power. Most of the multinationals initialed operations with the acquisition of Israeli startups. 105 employ more than 100 persons each. 128 are in the area of information technology and enterprise software; 64 – telecommunications; 48 – life sciences; 42 – Internet; 38 – semiconductors, etc.

Intel has the largest presence – 12,800 employees in four research & development centers (Haifa, Jerusalem, Petah Tikvah and Yakum) and two manufacturing facilities (Jerusalem and Kiryat Gat, which is one of Intel’s most advanced facilities in the world), exporting $3.6BN annually. Intel’s 7th and 8th generation Intel-Core processors were developed mainly in Israel. Intel Capital’s investment portfolio includes 28 Israeli startups in the areas of cybersecurity, Internet, enterprise software, cloud computing, autonomous vehicles and 5G (the next phase in global telecommunications). In 2018, Intel Capital invested $120MN in 14 Israeli startups, out of a total of $400MN invested in 95 startups globally.
Additional multinational corporations operating in Israel: Microsoft, IBM, GE, Johnson & Johnson, Merck, Marvell, Apple, AT&T, Facebook, Google, Cisco, 3M, AOL, Yahoo, E-bay, Amazon, Pfizer, Oracle, Sony, SanDisk, Philips, Siemens, Deutsche Telecom, Alibaba, Huawei, etc.

2. A record of 211 overseas venture capital funds (mostly USA) operate in Israel – up from 149 in 2013 – primarily investing in software startups (source: Israel VC Research Center).
3. During the first quarter of 2019, Israeli startups raised $1.55BN in 128 rounds, compared to $1.2BN in 111 rounds during the first quarter of 2018. Artificial intelligence (AI) startups attract increased attention – 51 AI startups raised $600MN during the first quarter of 2019. 57 software startups raised $660mn (Globes Business Daily, April 17, 2019).

4. Israel is becoming a hotbed of digital health (artificial intelligence) activity with 537 digital health startups in 2018, up from 327 in 2014, benefiting from more than $500MN in private investments – a 32% increase over 2017. For example, Israel’s AiDoc partnered with the American College of Radiology Data Science Institute, raising $27MN in Series B funding. Israel’s TytoCare raised $25MN, establishing partnership with Best Buy. 47 US investors constituted 67% of foreign investors in Israel’s digital health startups in 2018 (Business Insider, April 19).

5. The Silicon Valley-based Nvidia acquired Israel’s Mellanox for $6.9BN, the third largest “exit” of an Israeli company to date, following Frutarom, which was acquired by the NY-based Flavors and Fragrances for $7.1BN and Mobileye, which was acquired by Intel for $15.3BN (Globes, March 12). MacDonald’s second-largest acquisition in 20 years is Israel’s artificial intelligence Dynamic Yield startup for $300MN (Globes, March 27). The NJ-based ID Systems acquired Israel’s Pointer (remotely monitored and controlled Internet of Things) for $140MN (Globes, March 15).

6. Israel’s artificial intelligence (online property and casualty insurance) Lemonade raised $300MN in a round of private placement led by Japan’s Softbank, Germany’s Allianz, Googles’ venture capital arm, the Silicon Valley-based GV and the NY-based Thrive Capital. Softbank also led a prior round of $120MN (Globes, April 12). Israel’s cybersecurity Tufin raised $108MN at the NY Stock Exchange. The round was led by JP Morgan, Barclays Capital and Jeffries, Oppenheimer & Co. and Piper & Jaffray. Israel’s 3-year-old Innoviz (autonomous vehicles’ sensors and perception software) raised $132MN from China Merchants Capital, Shenzhen Capital and New Alliance Capital.

7. In 2018, there were 6,673 Israeli startups. 1,150 startups in the Artificial intelligence area (512 in 2014) raised $2.25BN ($1.33BN in 2017 and $0.5BN in 2014). It was 37% of the total raised by Israeli startups in 2018 – $6BN ($15% increase from 2017). 97 Israeli startups were sold in 2018 for $3.28BN, 49% sold to Americans and 30% to Israelis. Most investors are from Israel, closely followed by the US, and then Britain, Germany and China (Globes, March 12).

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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