On the 62nd anniversary of the founding of the Jewish state, a reminder of what David ben Gurion said regarding Israel's ability to thrive -- "to be a realist, one must believe in miracles." ( CMPI has been a proud partner of program based at the Tel Aviv University School of Management to support life science entrepreneurship in Israel for the past three years. “Health Care Technological Innovation - From Idea to Commercialization.” ) Israel's robust contribution to biomedical innovation -- despite the threat of terrorism and annihilation -- is truly miraculous:
According to the WEF 2007-2008 Competitiveness Report, Israel has the 5th highest number of patents pending in the world and ranks 3rd in technological readiness. Israel is ranked in 1st in the world for Medical Device Patents per capita, and ranks third in Europe for the number of clinical trials in progress.
Fourth in the world in biotechnology patents per capita, Israel not only has the talent to innovate, but the skills to transform technology into successful enterprise. A generous government incentives program is a major factor for pushing progress forward.
Entrepreneurship in Israel
Israel has the largest number of startups in the world per capita. In absolute numbers, Israel is only second to the US. Israeli startup companies are known for their creativity, innovation, and originality. Israeli ingenuity can be found in some of the world's leading products and technologies: voice mail, billing systems, internet security, instant messaging, ingestible video cameras, and generic pharmaceuticals.
Investments in Israel
Israel has the largest number of companies listed on the NASDAQ outside of the United States and approximately 70 Israeli companies are traded on various European exchanges.
According to the Israel Venture Capital Research Centre, Israel requires approximately $1.5 Billion of new investment annually to support its developing companies. Israel continues to attract capital both locally and from abroad. However, there continues to be a strong need to fuel the capital requirements of early-stage companies
Many major multi-nationals have chosen to run core activities in Israel including: HP, Microsoft, Intel, IBM, Siemens, GE, SAP, Philips, Time Warner, Sony, Cisco, Google, eBay, Analog Devices, Computer Associates, Berkshire-Hathaway, Applied Materials, Sun Microsystems, 3Com, Motorola, Pfizer, J&J and more.
Israel’s high tech industry in particular is extremely profitable and attractive to foreign multinationals.
2007 witnessed over 40 international Mergers & Acquisitions.
Mergers and Acquisitions in Israel
Major foreign firms have stepped up their local M&A activities, and direct foreign investment in Israel has exceeded $2 Billion annually.
2006 saw a record number of Mergers & Acquisitions - a total of 76 Israeli companies were acquired. Warren Buffet's Berkshire-Hathaway made its first international investment when the company made its monumental acquisition of Israeli ISCAR for $4 billion, HP acquired Mercury for $4.5 billion and SanDisk acquired M-Systems for $1.5 billion. Other examples of multinational companies that have acquired Israeli companies include: Microsoft, Motorola, Intel, HP, Siemens, Samsung, IBM, GE, Phillips, Lucent, AOL, J&J, Applied Materials, Sun Microsystems, EMC, Boston Scientific, eBay, HP, Kodak, Cisco and Xerox.
M&A activity involving Israeli companies that were either acquired or merged totaled $3.2 billion in 2007 in 75 deals – the second highest number of M&A deals in any one year to date.
Mergers and acquisitions of VC-backed Israeli companies in 2007 totaled $1.9 billion and consisted of 32 deals.
Venture Capital in Israel
With 100 active funds and over $10 billion under management, Israel’s venture capital industry thrives like in no other country. In 2004, foreign funds committed over 50% of the total dollars invested, demonstrating that Israel is an internationally sought after and sound investment (Israel ’s Ministry of Industry, Trade and Labor).
In the past 10 years, Israeli VC's attracted a total of $10.6 Billion. According to IVC, $2 Billion in capital is currently available for investment by Israeli VC's, of which $1.2 billion is intended for First investments in high-tech companies and the remainder reserved for Follow-on investments. $800 Million is expected to be raised in 2008 by Israeli VC's for investment in Israeli high technology over the next few years. (IVC Online)
In 2007, 462 Israeli high-tech companies raised $1.76 Billion from local and foreign venture investors, 8.5 percent above the $1.62 billion raised in 2006 and 31.5 percent above 2005 levels.
In the fourth quarter, 115 Israeli high-tech companies raised $503 million, a 21 percent increase from the $414 million raised by 108 companies in the third quarter and a 5 percent increase from Q4 2006. (IVC Online)
In 2007, Israeli VC's invested $678 million in Israeli high-tech companies. The Israeli VC share of the total amount invested in Israeli high-tech companies was 39 percent.
Israeli VC's invested $50 million in foreign companies during 2007 (in addition to their investments in Israeli high-tech companies), compared to $60 million in 2006 and $95 million in 2005. Three of the 39 investments were first investments and the remainders were follow-on.
In 2007, 78 Seed companies attracted $151 million, the highest amount raised since 2001.
