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

By Ambassador (ret) Yoram Ettinger

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 NASDAQthan 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 andCRV 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 Partnersled 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).