Wednesday, September 15, 2004

  • Wednesday, September 15, 2004
  • Elder of Ziyon

After a years-long slump, Israel is seeing a slew of IPOs, mergers, and new startups

Israel's high-tech sector finally is emerging from a long financial drought. On Aug. 25, Cisco Systems Inc. acquired P-Cube Inc., a Tel Aviv developer of network-traffic-management hardware, for $200 million. The deal was Cisco's second in Israel in three months, and it's not the only Silicon Valley player on the prowl. 'There's a lot of talk about several of the major global technology players on the verge of cutting deals in the next few weeks,' says Gilay Dolev, senior analyst at D&A High Tech Information Ltd., an industry-analysis firm based just outside Tel Aviv.

Why the renewed interest in Israel? First, for a small country, Israel has lots of startups. And startups, unlike big Western tech giants, didn't have the luxury of cutting back research & development to get through the downturn. So the Israelis kept innovating even as the global tech industry swooned and fighting surged between Israelis and Palestinians. Now there are lots of small survivors with leading-edge technology in areas such as Internet security, wireless broadband, and medical devices. No wonder acquisition activity is up by some 25% over the past year.

The global recovery has energized Israel's so-called silicon wadis, the collective term for the dozen-plus high-technology parks scattered throughout the country. Tech exports surged 20% in the first six months of the year, to more than $6 billion. And the Tel-Tech 15 index is up 48% in the past 12 months.

Israeli high-tech companies also are returning to Wall Street after a lengthy hiatus. So far this year three outfits -- Lipman Electronic Engineering Ltd., which develops electronic payment systems, PowerDsine Ltd. (PDSN ), a maker of integrated circuits for telecoms, and Syneron Medical Ltd. (ELOS ) -- have joined the over 70 local high-tech outfits traded on the NASDAQ. 'There are at least a half-dozen initial public offerings and a number of follow-on offerings ready to go to market by the end of the year,' says Leonard G. Rosen, Lehman Brothers Inc. managing director and head of the investment bank's Israeli business.

One of Israel's successful tech entrepreneurs is Giora Yaron, co-founder of P-Cube. The 56-year-old physicist has launched four companies, two of which he sold to Cisco. Before picking up P-Cube in August, Cisco paid $118 million for Pentacom Ltd. in 2000. 'There's no secret recipe for successful startups. It's just having the right technology when the big boys need it,' claims Yaron. In the case of P-Cube, Cisco was hearing from its own customers about the need to integrate the Israeli startup's technology into its networking routers.

Cisco's love affair with Israeli high tech began in 1998, when it acquired Class Data Systems, a maker of quality-control software, for $50 million. Since then it has ponied up nearly $1 billion for seven Israeli startups, three of them in the past few months. '[The Israelis] have a strong tradition of innovation in engineering and a strong technical tradition. It's similar to what we see in Silicon Valley,' says Ned Hooper, senior director for corporate development for Cisco.

Despite the new deals, no one anticipates a return to the heady days of 2000. In June of that year, Lucent Technologies Inc. bought Chromatis Networks for a hefty $4.8 billion, the most ever paid for an Israeli startup. By contrast, 17 of 31 deals in the past year have been for less than $10 million. 'Valuations have come down to earth,' says Zeev Holtzman, founding partner of Tel Aviv-based Giza Venture Capital, a leading local fund.

That's one of the main factors drawing venture capitalists to Israel. Industry experts predict local venture funds will raise over $1 billion this year, with most of the funds coming from American and European institutional investors. The wadis certainly need the rain."

EoZTV Podcast

Podcast URL

Subscribe in podnovaSubscribe with FeedlyAdd to netvibes
addtomyyahoo4Subscribe with SubToMe

search eoz



follow me

Follow by Email


Share on Whatsapp


For $18 donation

Sample Text

EoZ's Most Popular Posts Ever


Elder of Ziyon - حـكـيـم صـهـيـون

This blog may be a labor of love for me, but it takes a lot of effort, time and money. For over 12 years and over 25,000 articles I have been providing accurate, original news that would have remained unnoticed. I've written hundreds of scoops and sometimes my reporting ends up making a real difference. I appreciate any donations you can give to keep this blog going.


Donate to fight for Israel!

Monthly subscription:
Payment options

One time donation:

subscribe via email

Follow EoZ on Twitter!



The Jerusalem Report:"A seemingly indefatigable one-man operation, armed only with a computer, chutzpa and stamina."

Algemeiner: "Fiercely intelligent and erudite"

Omri: "Elder is one of the best established and most respected members of the jblogosphere..."
Atheist Jew:"Elder of Ziyon probably had the greatest impression on me..."
Soccer Dad: "He undertakes the important task of making sure that his readers learn from history."
AbbaGav: "A truly exceptional blog..."
Judeopundit: "[A] venerable blog-pioneer and beloved patriarchal figure...his blog is indispensable."
Oleh Musings: "The most comprehensive Zionist blog I have seen."
Carl in Jerusalem: "...probably the most under-recognized blog in the JBlogsphere as far as I am concerned."
Aussie Dave: "King of the auto-translation."
The Israel Situation:The Elder manages to write so many great, investigative posts that I am often looking to him for important news on the PalArab (his term for Palestinian Arab) side of things."
Tikun Olam: "Either you are carelessly ignorant or a willful liar and distorter of the truth. Either way, it makes you one mean SOB."
Mondoweiss commenter: "For virulent pro-Zionism (and plain straightforward lies of course) there is nothing much to beat it."
Didi Remez: "Leading wingnut"

Interesting Blogs


Abbas liar Academic fraud administrivia al-Qaeda algeria American Jews Amnesty analysis anti-semitism antisemitism apartheid arab refugees Arafat archaeology art ASHREI B'tselem bahrain Balfour bbc BDS BDSFail Bedouin Beitunia beoz book review Brant Rosen breaking the silence Campus antisemitism Cardozo Chakindas Chanukah Christians Clark Kent conspiracy theories Cyprus Daled Amos Daphne Anson David Applebaum Davis report DCI-P Divest This double standards Egypt Elder gets results ElderToons Electronic Intifada Embassy EoZ Trump symposium eoz-symposium EoZNews eoztv Erekat Erekat lung transplant EU Euro-Mid Observer European antisemitism Facebook jail Fake Civilians 2014 Farrakhan Fatah featured Features fisking flotilla Forest Rain Forward free gaza freedom of press palestinian style future martyr Gary Spedding gaza Gaza Platform George Galloway George Soros German Jewry gideon levy gilad shalit gisha Goldstone Report Good news Grapel Guardian gunness Haaretz Hadassah hamas Hamas war crimes hasbara Hasby 2014 Hasby 2016 Hasby 2018 Hebron helen thomas hezbollah history Hizballah Holocaust Holocaust denial honor killing HRW Human Rights Humanitarian crisis humor huor Hypocrisy ICRC IDF Ilan Pappe impossible peace incitement Indonesia international law intransigence iran Iraq Islamic Judeophobia Islamism Israel Loves America Israeli culture Israeli high-tech J Street jabalya jeremy bowen Jerusalem jewish fiction Jewish Voice for Peace jihad jimmy carter John Kerry jokes jonathan cook Jordan Joseph Massad Juan Cole Judaism Judea-Samaria Judean Rose Kairos Karl Vick Keith Ellison ken roth khalid amayreh Khaybar Lebanon leftists Linda Sarsour Linkdump lumish mahmoud zahar Malaysia max blumenthal Mazen Adi McGraw-Hill media bias Methodist Michael Ross Miftah moderate Islam Mohammed Assaf Mondoweiss moonbats Morocco Mudar Zahran music Muslim Brotherhood Nakba Nation of Islam Natural gas Nazi News nftp NGO NIF Noah Phillips norpac NYT Occupation offbeat Omar Barghouti Only in Israel Opinion oxfam PA corruption PalArab lies Palestine Papers pallywood pchr PCUSA Peace Now Peter Beinart Petra MB poetry Poland poll Poster Preoccupied Prisoners propaganda Proud to be Zionist Puar Purim purimshpiel Putin Qaradawi Qassam calendar Quora Rafah Ray Hanania real liberals reference Richard Falk Richard Silverstein Right of return Robert Werdine rogel alpher roger cohen roger waters Rutgers Saeb Erekat Saudi Arabia saudi vice self-death self-death palestinians sex crimes SFSU shechita sheikh tamimi Shujaiyeh Simchat Torah Simona Sharoni SodaStream South Africa Speech stamps Superman Syria Tarabin Temple Mount Terrorism This is Zionism Thomas Friedman TOI Trump Tunisia Turkey UCI UK UN UNDP unesco unhrc UNICEF United Arab Emirates Unity unrwa UNRWA hate unrwa reports UNRWA-USA unwra Varda Vic Rosenthal Washington wikileaks work accident X-washing Y. Ben-David Yemen YMikarov zahran Ziesel zionist attack zoo Zvi

Blog Archive