Straight From The Jerusalem Boardroom #112, February 9, 2007
1. MORGAN STANLEY, Jan. 10, 2007: â€œForeign capital flows to Israel surged from $3.2BN in 2002 to $11.6BN in 2005 and a record level of $23.4BN last yearâ€¦ The Shekel is fundamentally undervalued against the dollar and even more so against the euroâ€¦ Despite geopolitical constraints and indeed the eruption of a guerilla war in Lebanon, the Israeli economy has continued to grow at a robust paceâ€¦Israelâ€™s economy has the strength to withstand a global slowdownâ€¦ The Bank of Israel has opted for monetary easing and lowered short-term interest rates even below those in the USâ€¦Consumer price inflation declined from 3.8% in April to minus 0.3% in Novemberâ€¦ Budget deficit [was reduced] from 5.4% of GDP in 2003 to 0.9% last yearâ€¦ The current account surplus is not just a cyclical phenomenon. Israelâ€™s current account balance moved from a deficit of 0.5% of GDP in 2002 to a surplus of 2.9% in 2005 and about 6% [surplus] last yearâ€¦â€ (Globes, Jan. 11, 2007).
2. ISRAEL RANKS 3RD IN THE WORLD ($1.4BN) â€“ behind California ($12.4BN) and Massachusetts ($2.8BN), ahead of New York ($1.3BN) and Texas ($1.2BN) â€“ in the level of 2006 high tech investments, according to ERNST YOUNG. The 2006 high tech investment in Israel increased 13% over 2005. According to Israelâ€™s IVC, 2006 totaled $1.6BN, compared with $1.3BN â€“ 2005, $1.5BN â€“ 2004, $1MN â€“ 2003, $1.1BN â€“ 2002, $2BN â€“ 2001, $$3.1BN â€“ 2000 and $1BN â€“ 1999 (The Marker, Jan. 23).
3. ACCELâ€™s MANAGING PARTNER, Joe Schoendorf: â€œIsrael, China and the Silicon Valley are the focus of future technologiesâ€¦Over 50% of the $400MN invested by us since 2001, have been invested in 20 Israeli companiesâ€¦Exacerbated security threats have enhanced technological innovationsâ€ (The Marker, Jan. 25).
4. $353MN and $102MN RAISED ON NASDAQ by Israelâ€™s CellCom and Mellanox Technologies respectively, representing market value of $2BN and $500MN respectively (Globes, Feb. 7, Feb. 9).
5. US-based GLASSHOUSE acquired Israelâ€™s MBI and Integrity Systems for $27MN (Globes, Feb. 8). The $1.8BN US-based TESSERA acquired Israelâ€™s EyeSquad for $18MN, its second Israeli acquisition, following ShellCase – $33MN in 2005 (The Marker, Jan. 31). MICROSOFT has acquired Israelâ€™s Secured Dimensions (Globes, Jan. 9). SINGAPOREâ€™s SCIGEN inaugurated its $30MN 120 employees Israel pharmaceuticals plant (The Marker, Jan. 9). NEXTWAVE acquired Israelâ€™s GoNetworks for $15MN and additional $26MN if milestones are met (Globes, Jan. 5).
6. ADAMS STREET PARTNERS led a 5th round of private placement by Israelâ€™s Actelis Networks, along with the CARLISLE GROUP, ATA VC FUND, etc. (Jan. 23). US-based SEQUEL VENTURE PARTNERS, QUEST CAPTIAL and HUNT VENTURES PARTNERSHIP participated in a $20MN round by Israelâ€™s Glucon (Globes, Jan. 22). SEQUOIA CAPITAL, ACCEL PARTNERS, GLOBESPAN CAPITAL PARTNERS participated in a 2nd round by Israelâ€™s Amobee (Globes, Jan. 5). SEQUOIA CAPITAL and ACCEL PARTNERS participated in a $20MN 2nd round by Israelâ€™s Discretix (Globes, Jan. 5). GREYLOCK VENTURES participated in a $14MN 2nd round by Israelâ€™s Camero (Greylockâ€™s 11th Israeli investment), along with ELTA BERKELEY, MOTOROLA VENTURES (The Marker, Jan. 8). INTEL CAPITAL co-led a $12 2nd round by Israelâ€™s Lucid (The Marker, Jan. 2). US-based PILOTHOUSE participated in a $4.5MN round of private placement (Globes, Feb. 2). BENCHMARK invested $4MN and $3.5MN in Israelâ€™s Gigya and Sentrigo respectively (Globes Feb. 5, The Marker Jan. 29). (EARLY STAGE PARTNERS (Cleveland) and ASTRO MFG invested $3MN in Israelâ€™s Simbionix (Feb. 7).
7. HP is hiring 150 software engineers to its Israeli R&D center â€“ which is HPâ€™s largest R&D center in the world – consistent with its Vice President, Tom Hoganâ€™s, statement that â€œIsrael is HPâ€™s winning card!â€ (Globes, Jan. 22).
8. Israelâ€™s EXPORTS grew by $3.7BN, while IMPORTS increased by $2.7BN. Exports to the US (excluding diamonds) – $9.6BN, Germany – $1.7BN, England – $1.4BN, Holland – $1.3BN, France – $1BN (The Marker, Jan. 18).