Waze, ScaleIO, PrimeSense, Onavo, and Intucell might not sound like household names to the general public just yet, but Google, Facebook, Apple, IBM, Cisco and eBay, to name a few, have paid serious attention to them in 2013, buying each of them for hundreds of millions. The one exception is Waze, which Google purchased for over $1 billion this past June.
These titans of tech have been purchasing multiple startup companies in Israel since 2000 and are part of the reason why Israel is the only other country, after the United States, with the greatest number of companies listed on the NASDAQ stock exchange, according to the 2009 best-selling book “Startup Nation” (Dan Senor and Saul Singer, Twelve Publishing).
“The climate is extraordinary,” said Jonathan Medved, the internationally recognized founder and creator of OurCrowd, the online individual-investor funding platform for Israeli startups. “This [coming] year, there will be $2.3 billion invested in Israeli startups — approximately 600-plus. These are huge numbers.”
On Medved’s site, single investors can pick from a curated selection of companies that OurCrowd has already put its own money into. He told JTNews his business continues to grow.
“For every 100 companies we look into, we select one or two,” said Medved. “We have 30 this year and next year we will have 50 or 60.”
Google made industry news when it won a bidding war against Facebook, Microsoft, Apple, and others to ultimately purchase Waze, regarded as the world’s biggest social-networking-based navigation application and online real-time mapping service, according to Reuters.
IBM bought security firm Trusteer for a reported $800 million in 2013 and founded a new IBM Cyber-security software lab in Israel.
According to research from Israel Venture Capital, Israel’s high-tech companies raised more than $4 billion from 2011 to 2012, compared with the $2.4 billion that was raised from 2009 to 2010.
The Startup and Private Equity Directory reported that from 2003 to 2012, “772 Israeli were acquired for $41.6 billion and in the third quarter of 2013, 162 companies raised $660 million from local and foreign investors, the highest quarterly amount since 2000.”
“In the last 22 years, there have been 1,000 Israeli companies purchased,” Medved said. “Companies like Microsoft, Intel, Cisco, Google, and Facebook are not buying one or two companies. They are buying lots of them. Since 1990, some of them have been buying double-digit companies. Today, there are 300 multinational research and development centers in Israel.”
But while these impressive acquisitions make headline news, smaller companies purchased hundreds of lesser-known Israel startups in 2013 as well.
According to Forbes Magazine, some of the larger acquisitions in October alone included Assurion’s buyout of Soluto, a web-based remote manager for PCs for $100 million, and Quixey, a “search and discovery engine for apps that closed a $50 million Series C round of funding from new investors,” the article said.
Washington State, arguably an emerging tech hub in its own right, has also been paying attention to Israel’s success.
Chuck Broche, founder of the Broche Group, a public affairs, government relations and strategic communications firm, also sits on the board of the Washington-Israel Business Council. He and his associates have been working closely with the Washington Biotechnology and Biomedical Association’s president and CEO Chris Rivera to build connections between Israeli high-tech and Washington innovators.
Broche is hoping to capitalize on three events in Washington scheduled for June 2014 — his group’s June 18 Seattle pitch to a select group of invited Israeli companies to highlight the region’s high-tech offerings, a WBBA Life Sciences Conference in Seattle on June 19 and 20, and the national WBBA conference in San Diego on June 23 and 24.
“We are calling it a mini-conference or a workshop,” Broche told JTNews. “Our goal is to bring over a half-a-dozen or more Israeli companies that are in the biomedical sector because we have a very strong biomedical technology sector in Washington State already.”
In the not too distant future, Broche envisions a group of Washington business leaders, accompanied by either a member of the Seattle Chamber of Commerce, the governor or a congressional member, who would travel to Israel on a trade mission.
“We are still a small dot on the map of the Israeli minds,” Broche said. “Most Israelis do not know what’s going on in Washington State and most people in Washington State have a vague idea about what’s going on in Israel.”
Broche is also hoping that Washington will become popular as the “friendlier” place to start a technology business. The WIBC website includes a section on everything a prospective entrepreneur might need to know to start a business in the state.
“When you’re dealing with technology and you’re dealing with creative people, we don’t want to be limiting their creativity or their applications of technology,” Broche said. “We want to be the group that is helping facilitate that.”