A powerhouse in the international business community is emerging. Israel, a country of only 7.6 million people (New York City has 8.4 million people), has fostered thousands of startups in recent years. These startups are achieving tremendous success both in terms of the products and services that they create and the value they generate for investors. The year 2015 continued the trend as the money generated by exits in Israel topped the $5 billion mark for the fifth straight year. This consisted of Israeli companies that were either sold to larger corporations or made Initial Public Offerings in 2015. This is an unprecedented success for a country its size and a true testament to the determination of the Israeli people, their penchant for innovation and the significant support given by the Israeli government.
In 2015, 96 Israeli startup and high-tech companies were sold and eight companies had IPO’s totaling $9.02 billion. This is highest total since 2012, when exits totaled $9.75 billion, according to a report by the IVC Research Center and the law firm Meitar Liquornik Geva Leshem Tal. Among these exits were a record $4.98 billion in venture capitalist-backed deals (highest in 10 years) and eight IPOs tallying $609 million. It should be noted that the number of IPO’s dropped sharply from previous years. According to the IVC report, markets, including the NASDAQ, are looking less favorably on these transactions.
The most notable Israeli exits in 2015 included:
- HeartWare’s $860 million acquisition of Valtech Cardio. Valtech is a cardiac valve repair company.
- Microsoft’s acquisition of Adallom ($325 million) and Secure Islands ($150 million). Adallom provides a secure platform for cloud applications. Secure Islands produces information protection and control systems.
- D & H Corporation’s $1.25 billion acquisition of Fundtech. Fundtech is a financial software developer.