Investors in Israel discount the threats

Straight From The Jerusalem Boardroom.

Yoram Ettinger

Shabbat Shalom and may we heed the lesson of this week’s portion of the Torah (EKEV): Remembrance, Education and attachment to the Land/Roots are prerequisites for Deliverance, while Forgetfulness and detachment from Values and the Cradle of History lead to Oblivion,

1. ISRAEL RANKS 3RD in the world, following California and Massachusetts, ahead of New York and Texas in the volume of high tech investment. According to Price Waterhouse-Coopers, $626MN was invested by VC funds in Israel’s high-tech (161 companies) during the first half of 2007 – the highest since 2001 ($885MN). $618MN was invested during the first half of 2006 (149 companies). ISRAEL IS A PREFERRED SITE – along Canada, China and India – for investments by 46% of US VC funds, which invest overseas (The Marker, July 16, 2007). According to Israel Venture Capital, $842MN was invested in Israel’s high-tech during Jan.-June, 2007 (Globes, July 17, 2007).

2. ALL TIME HIGH INVESTMENT IN ISRAEL’s REAL ESTATE by overseas investors – $784MN during Jan.-June, 2007 ($1.57BN annually), compared with $1.44BN in 2006 and $1.2BN in 2005 (Globes, July 10).

3. UBS’ CHIEF ECONOMIST, Reinhardt Klaus: “9/11 demonstrated that Israel was not the most risky site on earth, and that the entire globe is a risky place for business… Political uncertainties do not deter investors, since – unlike most other sites – they would be satisfied with the political alternative to the current government… Notwithstanding the absence of natural resources, Israel’s economy is stronger than all background noises in the Middle East… Growth, low deficit and decreased unemployment have been sustained in spite of regional and domestic events… Investors who did not enter the Israeli market during the Lebanese War, and in its aftermath, could only watch the market booming…(The Marker, June 21).

4. AIG’s CEO, Martin Sullivan: Israel’s economic indicators supersede political and security considerations, when it comes to investment decisions. When I examine Israel I notice a superb human factor, an impressive progress in the high tech and pharmaceuticals areas, a major flow of overseas investments – including from the US – and a negative inflation. Israel is a potential site for investments…” (Globes, June 19).

5. LEHMAN BROS.: “Israel’s economy is strong enough to withstand a probable Tony Blair’s inability to produce an Israeli-Palestinian agreement, disturbing findings by the Winograd Commission and a series of legal-ethical scandals… The world is reacting more moderately to political instability and hostilities” (Globes, July 5).

6. CISCO’s Sr. VP, Cliff Meltzer: Cisco’s R&D center is the second largest outside the US next to India (which includes marketing and sales). 750 are employed in Israel, 100 hired last year. CISCO ACQUIRED 9 ISRAELI COMPANIES in recent years, in order to acquire breakthrough technologies – which are difficult to be found in other countries – stay ahead of the competition and benefit from the Israeli innovative entrepreneurial spirit (July 9).

7. NOKIA-SIEMENS NETWORKS is hiring 60 R&D personnel, in addition to its 350 employees in Israel, defining Israel as a key country for future technologies (The Marker, July 3).

8. $172MN raised by Israel’s ATAC (a Blank Check company) on AMEX (The Marker, June 25). $170MN raised by Israel’s Park-Plaza at London’s AIM (Globes, July 13). $48MN raised by Israel’s Limco (subsidiary of T.A.T) on NASDAQ (Globes, July 20).

9. AUSTRALIA’s BABCOCK & BROWN acquired Israel’s Yellow Pages for $123MN, while also assuming a $122MN debt (Globes, Aug. 2). BOSTON SCIENTIFIC acquired Israel’s Remon for $80MN (Globes, June 22). The US-based LIVE PERSON has acquired Israel’s Kasamba for $40MN (Globes, June 27). American investors acquired Israel’s Discount-Mercantile Pension Funds for $18MN (July 31). 21ST VENTURES acquired 29% of Israel’s Hadas for $4MN (Globes, Aug. 2).

10. INSTITUTIONAL VENRUE PARTNERS led a $30MN round by Israel’s Quigo (Globes, June 29). CORAL, INTEL CAPITAL, KODAK, HITACHI, EVERGREEN participated in an $18MN 5th round by Israel’s Exanet (The Marker, June 26). WARBURG-PINCUS invested $12MN in 2nd round of private placement by Israel’s Vringo (Globes, Aug. 1). BENCHMARK CAPITAL and CHARLES RIVER VENTURES participated in a $10MN 3rd round private placement by Israel’s Qlusters (Globes, Aug. 2, 2007). RED POINT VENTURES co-led a $10MN round by Israel’s AdapTV (Globes, July 12). FRANCE’s LEADING VC FUND, SOFINOVA, NORWEST VENTURE PARTNERS and BENHAMO GLOBAL VENTURES led a $9.6MN 1st round by Israel’s ConteXtream (Globes, July 19). SOFTBANK CAPITAL invested $6MN in Israel’s InsightTix (Globes, July 27). LANDING CREOS CAPITAL led ($3MN) a $5MN round by Israel’s PrinTar (Globes, June 27). SEQUOIA CAPITAL co-led a $5MN round by Israel’s Silent Communication (Globes, July 9). CISCO invested $4MN in Israel’s Optir (Globes, July 24). GLIDE INVESTMENT MANAGEMENT and SIERRA VENTURES participated in a $4MN round by Israel’s WebCollage (The Marker, June 19).

August 4, 2007 | Comments Off on Investors in Israel discount the threats

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